orson
November 27th, 2009, 09:05 PM
by Ron Jones,
Geen Builder Media
The story on the evening news could have come from just about anywhere in the country and it could have been reported on practically any day of the week. A young single man, a firefighter in Nevada, was briefly profiled in a report about the realization of one of his long term goals. He was being handed the keys to the home he had just purchased, apparently his first home.
He was obviously excited, even though it was expressed in a controlled and quiet way, but it was equally clear that he understood the gravity of the responsibility he had just taken on, which carried with it a risk that is not insignificant to his financial future. He didn't have to be hit over the head by the irony that the home he had just purchased had been previously lost to foreclosure by a prior owner. Even though he had purchased the home for roughly half the price it had been sold to the previous owner for, it was inescapable to him, and to the television viewer, that he could conceivably find himself in a similar, if not identical, situation down the road.
Earlier that very same day I had been forwarded a press release from the Mortgage Bankers Association with news that the delinquency rate for home mortgages broke the record set last quarter, based on MBA data dating back to 1972. The release went on to state "the delinquency rate includes loans that are at least one payment past due but does not include loans somewhere in the process of foreclosure" but also adds that "the percentages of loans 90 days or more past due, loans in foreclosure, and foreclosures started all set new record highs".
Just a few evenings before the story about the new homeowner aired I had watched a news segment involving a middle-aged couple who have, like so many others in this economy, lost their jobs and have since come to realize that it is only a matter of time until they will be forced to vacate their home, leaving their dreams in ruins. They were stoic in their acceptance of the situation and expressed that they are simply trying to enjoy each and every day they remain under that roof, because any day there could be the last. It was not clear where they intend to go when that day finally comes.
As I mentally compared these two news stories, I was reminded of yet a third news report, one that I had read in recent days, this one involving a growing set of Americans who are voluntarily opting to walk away from residential properties because they are upside down on their mortgages, owing more on the mortgage (in many cases much more) than the property is currently worth, deciding to cut their losses rather than toughing it out over the long haul in the belief that property values will recover over time. It's difficult to say why, but in some ways the most troubling part of the trend is that there is such a clinical approach to the decision by many. It is clear that having one's home foreclosed on simply no longer seems to carry the same stigma that it traditionally has, at least for certain consumers.
I think it is safe to say that a growing number of people in this country no longer hold onto the traditional view of home ownership, that it is so much more than a financial consideration, which has been an essential part of life for the vast majority of us.
All of this strikes me as particularly poignant stuff in the context of Thanksgiving and the rest of the impending holiday season. If you have ever spent your Thanksgiving volunteering at a homeless shelter or other venue providing meals to those people we carefully refer to as "the less fortunate" you cannot escape the fact that "home" is much more than shelter, more than just a place, in American culture. So it is alarming when I hear quotes from people for whom having theirs repossessed is entirely an immediate "dollars and cents" decision.
Hardly a day goes by when we are not faced with an avalanche of images featuring people who are joining the rapidly swelling ranks of the world's displaced. They are political refugees, climate refugees, natural disaster survivors, those desperately escaping war torn regions or even genocide. In our collective experience they historically come from the far corners of the world, the kinds of places that we only know through sterile television pictures. Even those images that have domestic origins have always contained an element of separateness about them, scenes from the historically least fortunate, least affluent parts of America...Appalachia, urban ghettos, obscure backwaters.
But now the faces are looking more familiar. Economic refugees who more often resemble the guy next door. Literally, in some cases. And while those who are choosing to walk away from their homes (and the mortgages that go with them) presumably have a plan "B" in mind, knowing where they are going to land once they leap, their decisions expose an unsettling reality that the underpinnings of home ownership as we know it are deteriorating for a substantial segment of the population.
My purpose here is not to judge these fellow citizens or to second guess their decisions or their actions. Rather it is to rhetorically ask whether this change if for better or for worse? Have new economic and social realities so altered the playing field that we need to reevaluate how we keep score? What does all of this portend for the future of American home ownership, and for those who are in the shelter industry?
Not too long ago the Oldsmobile division of General Motors embarked on a sales campaign suggesting that their cars were no longer the cars of our fathers. Soon after, they were no longer anybody's cars. They simply stopped making them. I wonder if there is a larger, more impactful lesson to be learned from that experience?
Geen Builder Media
The story on the evening news could have come from just about anywhere in the country and it could have been reported on practically any day of the week. A young single man, a firefighter in Nevada, was briefly profiled in a report about the realization of one of his long term goals. He was being handed the keys to the home he had just purchased, apparently his first home.
He was obviously excited, even though it was expressed in a controlled and quiet way, but it was equally clear that he understood the gravity of the responsibility he had just taken on, which carried with it a risk that is not insignificant to his financial future. He didn't have to be hit over the head by the irony that the home he had just purchased had been previously lost to foreclosure by a prior owner. Even though he had purchased the home for roughly half the price it had been sold to the previous owner for, it was inescapable to him, and to the television viewer, that he could conceivably find himself in a similar, if not identical, situation down the road.
Earlier that very same day I had been forwarded a press release from the Mortgage Bankers Association with news that the delinquency rate for home mortgages broke the record set last quarter, based on MBA data dating back to 1972. The release went on to state "the delinquency rate includes loans that are at least one payment past due but does not include loans somewhere in the process of foreclosure" but also adds that "the percentages of loans 90 days or more past due, loans in foreclosure, and foreclosures started all set new record highs".
Just a few evenings before the story about the new homeowner aired I had watched a news segment involving a middle-aged couple who have, like so many others in this economy, lost their jobs and have since come to realize that it is only a matter of time until they will be forced to vacate their home, leaving their dreams in ruins. They were stoic in their acceptance of the situation and expressed that they are simply trying to enjoy each and every day they remain under that roof, because any day there could be the last. It was not clear where they intend to go when that day finally comes.
As I mentally compared these two news stories, I was reminded of yet a third news report, one that I had read in recent days, this one involving a growing set of Americans who are voluntarily opting to walk away from residential properties because they are upside down on their mortgages, owing more on the mortgage (in many cases much more) than the property is currently worth, deciding to cut their losses rather than toughing it out over the long haul in the belief that property values will recover over time. It's difficult to say why, but in some ways the most troubling part of the trend is that there is such a clinical approach to the decision by many. It is clear that having one's home foreclosed on simply no longer seems to carry the same stigma that it traditionally has, at least for certain consumers.
I think it is safe to say that a growing number of people in this country no longer hold onto the traditional view of home ownership, that it is so much more than a financial consideration, which has been an essential part of life for the vast majority of us.
All of this strikes me as particularly poignant stuff in the context of Thanksgiving and the rest of the impending holiday season. If you have ever spent your Thanksgiving volunteering at a homeless shelter or other venue providing meals to those people we carefully refer to as "the less fortunate" you cannot escape the fact that "home" is much more than shelter, more than just a place, in American culture. So it is alarming when I hear quotes from people for whom having theirs repossessed is entirely an immediate "dollars and cents" decision.
Hardly a day goes by when we are not faced with an avalanche of images featuring people who are joining the rapidly swelling ranks of the world's displaced. They are political refugees, climate refugees, natural disaster survivors, those desperately escaping war torn regions or even genocide. In our collective experience they historically come from the far corners of the world, the kinds of places that we only know through sterile television pictures. Even those images that have domestic origins have always contained an element of separateness about them, scenes from the historically least fortunate, least affluent parts of America...Appalachia, urban ghettos, obscure backwaters.
But now the faces are looking more familiar. Economic refugees who more often resemble the guy next door. Literally, in some cases. And while those who are choosing to walk away from their homes (and the mortgages that go with them) presumably have a plan "B" in mind, knowing where they are going to land once they leap, their decisions expose an unsettling reality that the underpinnings of home ownership as we know it are deteriorating for a substantial segment of the population.
My purpose here is not to judge these fellow citizens or to second guess their decisions or their actions. Rather it is to rhetorically ask whether this change if for better or for worse? Have new economic and social realities so altered the playing field that we need to reevaluate how we keep score? What does all of this portend for the future of American home ownership, and for those who are in the shelter industry?
Not too long ago the Oldsmobile division of General Motors embarked on a sales campaign suggesting that their cars were no longer the cars of our fathers. Soon after, they were no longer anybody's cars. They simply stopped making them. I wonder if there is a larger, more impactful lesson to be learned from that experience?