Foreclosure Waves
by digby
There are more ahead. And it’s got some ugly consequences:
According to Robinson, those victims of foreclosure who do wind up being pushed out of their homes can be roughly divided into two waves.
The first wave consists of those who lost their homes because they were unable to keep up with payments on poor mortgages, often with cripplingly high interest rates. There’s no hard research as yet, but anecdotal evidence indicates that, although these people didn’t have the financial resources to keep up with their mortgage payments, most were able to rent apartments or even homes in their same communities.
But for the second wave, the transition hasn’t been nearly so seamless. These are the people who are unable to make mortgage payments because they’ve lost their jobs. They no longer have the incomes to afford rentals.
This second wave is creating a strong demand for social services, including homeless shelters — a demand that far exceeds supply. Again, as yet there is no hard data, but anecdotal evidence indicates a far higher percentage of these people are winding up in hotel rooms, with friends and relatives, in shelters, or even sleeping in cars or on the street.
Here in California, the effects of this are going to be huge:
California’s unemployment rate will soar to between 12 percent and 15 percent by next spring and remain in the double digits until at least the beginning of 2012, according to forecasts released by two teams of University of California economists.
The state’s unemployment rate has not reached those heights since the Great Depression.
I’m sure the fiscal scolds will be putting the hammer down on anyone who wants the government to step up with direct aid — and the GOP presidential hopeful club will be posturing and preening on this. But even if the economy were to turn around tomorrow (and it doesn’t look hopeful) the displacement from all this is going to be felt for some time to come.