Foreclosure Recap – Week #44
There is a very interesting story posted on the Business Week website this week. It asks a rather simple question that I think a lot people would be interested in knowing the answer and general consensus to. Should Wall Street Give Their Bonuses to the Homeless? Most people directly blame Wall Street for the problems that the country is in so it seems like a fair thought that they should be forced to give the bonus money that they receive to the people that they made homeless. It is morally the right thing for them to do but whether it is actually the right thing to do is another question. Since the people that work on Wall Street are actually expected to get some good bonus checks this season, the article raises some valid questions and some of the responses might amaze you. This is actually worth the time to read.
Everyone is feeling the crunch as the crisis continues to spread and widen rather than slow down and quell. In the Tampa Bay and St. Petersburg area in the state of Florida, as in all of the country, the stress of the many homeless families is putting a lot of strain on the already overtaxed homeless shelters. Once these were primarily a place for the indigent and bums today entire familes, many of middle-income brackets until recently, are now calling these shelters home. Where before only one person was there fathers, mothers and two and more children are seeking refuge from the storm that has befallen the country. People started living with relatives and then pay by the week motels and then finally resorting to the homeless shelters. Many of these folks are simply running out of options.
Not that this is going to come as a shock to people who are living this thing first hand, but the news media has come to the conclusion that President Obama and his plan to help the nation recover from the foreclosure crisis are stating that the economy has a long way to go in this recovery. According to a recent statement by the president, which I shall paraphrase here, the economy is up and growing but it is not enough. He went over numbers and some of the reasons behind the numbers and what might need to be done to get those to reverse.
For anyone that is a follower of Rock and Roll and specifically Southern Rock and Roll, this is a sad addendum to the foreclosure news. It seems that the home of many Southern Rocks early entries into music, the building that held Capricorn Records in Macon, Georgia – has fallen as a victim to the crisis and is scheduled to go up for auction and to be sold to the highest bidder. The studio housed such rock luminaries as the group Wet Willie, the legendary Allman Brothers Band, the Marshall Tucker Band. In addition several Rhythm and Blues performers recorded albums and miscellaneous tracks at the famous studio. Plans had been underway to turn it into a studio and museum fell through and is being blamed on the economic crisis that is facing the country as a whole and the Macon area of Georgia in particular.
This story from the United Press International shows just how bad things are getting with people simply walking away from the homes they were buying, The U.S. foreclosure rates are increasing and they are running into more issues than just banks that are unwilling to budge on the issues. As homeowners also choose to abandon their mortgages, economists said. With the prices of the family homes hitting all time lows, many family members have found their homes underwater financially speaking, what that means is that they owe a larger amount on the mortgages than they would be able to sell the home for. Under those conditions, the futility of making payments, especially if a breadwinner has lost a job, cause many to walk away and let the bank take the home. CitiMortgage, part of Citigroup, said 20 percent of their defaults are the result of homeowners strategically giving up on their loans and simply choosing to walk away from the home, and hope for the best. While it is not the best option available, when these families run out of options, it is sometimes the only one they are left with that they can do.
This weeks Celebrity foreclosure is Nicholas Cage. He made a reported $40 million dollars in the year between June 2008 and June 2009 and he is now officially broke and in debt to the IRS to the tune of Nearly $7 million dollars. His home in New Orleans has fallen into foreclosure and will be auctioned off next week. According to the story Cage has either sold o0r had foreclosed upon ad least seven homes so far. This according to the story is entirely due to his financial manager making risky investments that caused him to crash and burn. In short he appears to have ended up in the same boat as many of the rest of us. He spent too much money, bought things he couldn’t afford, fell behind in his bills, didn’t pay his taxes.
If you are one of the lucky few people buying and not losing a home to foreclosure in this market then you know that you have a significant deadline in store for you as far as taxes. There has been a race as property buyers try to move real estate purchases forward so that they can make the deadline for government’s $8,000 tax credit for first time buyers which expires at the end of the month of November. Meanwhile, the foreclosure crisis is moving into small towns and suburbs, which have previously been untouched by the economic downturn, according to new research. In a lot of states the foreclosure monster seems to have reached the smaller cities that had been fairly much unscathed. These include such areas as Chico, which is in the heart of the Sacramento Valley in California. Here there has been an astronomical increase of 98% in the foreclosure numbers when compared with the results from only third quarter of the year 2008.
Believe it or not many experts say the recession is over. But according to this story from Birmingham along with most areas of the country continued to rise through the month of September making it hard for most people to see how that could be the result of the end of the recession. Despite the rise, the local foreclosure rate in and around the Birmingham area remains below the national rate recorded in September, which was 2.93 percent.
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