Healers needed to treat foreclosure pain

 by Richard Mize NEWSOK Published: June 24, 2017

Mama, who was born in 1922, never quit saving margarine tubs.

My wife’s grandmother, Monnie, who was born in 1914, never quit saving scraps of foil.

Mama grew up, and Monnie came of age, during the Great Depression. It left indelible marks on them both.

So, good luck to anyone who thinks a little education on financial literacy will cure the millions of people afflicted with the Housing Heebee Jeebees as a result of living through the subprime mortgage meltdown, housing crash and Great Recession.

They’d just as soon rent, thank you.

Maybe times are different. Maybe millennials are savvier than the Greatest Generation. Maybe there’s an app for that.

It’s hard to say much about the lingering effect of sudden and prolonged economic hardship — and the fear it engenders — especially when life dreams are dashed.

About all you can say is the effect is real, but few folks have been bold enough to say it out loud: A generation of people may have been spooked away from homeownership, some of them for good.

Fresh research commissioned by the National Association of Realtors comes close. It acknowledges “post-foreclosure stress disorder” as one of five main barriers to buying keeping the national homeownership rate at a near 50-year low.

“There are long-lasting psychological changes in financial decision-making, including housing tenure choice, for the 9 million homeowners who experienced foreclosure, the 8.7 million people who lost their jobs, and some young adults who witnessed the hardships of their family and friends,” according to the researchers.

Most Americans “still have positive feelings about homeownership,” according to the study by Rosen Consulting Group, or RCG, and jointly released by the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley, Haas School of Business.

But many don’t, they said, and “targeted programs and workshops about financial literacy and mortgage debt could help return-buyers and those who may have negative biases about owning.”

Well, if people are going to be healed of wounds — and that is exactly what has happened to those millions: They’ve been wounded — there better be some healers involved.

I don’t mean preachers and teachers, although sometimes they can help. I mean historians and sociologists and psychologists, people who “get” the kind of social and personal upheaval that such a huge bust, hitting so many people so deeply, can have.

The housing crash wasn’t just an economic bust. For millions, it was a crisis of the spirit. That has to be acknowledged and treated.

The other four barriers to homeownership identified in the study are matters to be worked out by policymakers and the market place:

Mortgage availability: “Credit standards have not normalized following the Great Recession. Borrowers with good-to-excellent credit scores are not getting approved at the rate they were in 2003, prior to the period of excessively lax lending standards. Safely restoring lending requirements to accessible standards is key to helping creditworthy households purchase homes.”

Maybe. Probably. Of course. But all I’ve seen offered is deregulation back to “excessively lax.”

Student loan debt: “Young households are repaying an increasing level of student loan debt that makes it extremely difficult to save for a down payment, qualify for a mortgage and afford a mortgage payment, especially in areas with high rents and home prices.

“As (the National Association of Realtors) found in a survey released last year, student loan debt is delaying purchases from millennials and over half expect to be delayed by at least five years. Policy changes need to be enacted that address soaring tuition costs and make repayment less burdensome.”

Student loan debt is this era’s polio. It should be treated like polio and eradicated for the sake of society.

Single-family housing affordability: “Lack of inventory, higher rents and home prices, difficulty saving for a down payment and investors weighing on supply levels by scooping up single-family homes have all lead to many markets experiencing decaying affordability conditions.

“Unless these challenges subside, RCG forecasts that affordability will fall by an average of nearly 9 percentage points across all 75 major markets between 2016 and 2019, with approximately 5 million fewer households able to afford the local median-priced home by 2019. Declining affordability needs to be addressed with policies enacted that ensure creditworthy young households and minority groups have the opportunity to own a home.”

Affordability is the 900-pound gorilla in the great room.

Single-family housing supply shortages: “Single-family home construction plummeted after the recession and is still failing to keep up with demand as cities see increased migration and population as the result of faster job growth. The insufficient level of homebuilding has created a cumulative deficit of nearly 3.7 million new homes over the last eight years.”

Maybe. I want to see how “demand” is defined here, because multifamily developers haven’t been building all these apartments purely on spec. Where’s their documented demand? How does it overlap with demand for houses? If it’s based on household formation or immigration, are they counting the same people?

Richard Mize

Richard Mize

Real estate editor Richard Mize has edited The Oklahoman’s weekly residential real estate section and covered housing, commercial real estate,… read more ›

5 Responses

  1. DO NOT BUY A FORECLOSED HOUSE. LET WE THE PEOPLE MAKE SOME LAWS.

  2. This was all part of the banking scam. Who holds all blackstones ” invitational homes” mortgages for all the 10s of 1000s of their rental properties that they stole from us during the housing crisis that should have been homes on the open market. J.P. Morgan chase holds the mortgage to blackstones rental properties. They have depleted the supply and pushed up rents, a win win for both of these greedy bast$$ds. And they knew it when they collapsed the housing market. I would live on the streets before i give those a holes a dime of rent or mortgage. Nothing but a deal with the devil and i would never sell my soul to the devil.

  3. As a veteran clinician in naturopathic, chiropractic medicine and social work with a Bachelors degree in Psychology, I often consult with those that have either lost their home or about to. What seems to help the pain these people are experiencing is when I explain the concept of “ownership.”
    If you research the law concerning title, ownership, sovereignty, UNalienable verses INalienable Rights and more, you will realize most Americans, most United States “Citizens”, don’t own anything. It’s all about acceptance, consent, obligation, duty to perform and contracts.
    Even if you “own” your home “free and clear”, as long as you are paying property tax you are basically renting your property from the government. You can tell this is true when you stop paying property taxes. The government will come and take “their” house back and sell it to someone else.
    The same holds true with your car. If you don’t pay the registration fee, the government will tow “their” car off the “their” highway. Of course there are ways of avoiding this usurpation of your Rights, but you have to be a real person and NOT a PERSON.
    The bottom line: Most Americans do NOT truly own anything. Once you realize that, losing something you never really had comes a little easier. Losing the blood, sweat, tears and MONEY associated with your property is another story.

  4. My theory is if we tie the Banksters up w pro Se court thru Quiet Title actions they will bankrupt or be found out.

    So much illegal behavior who has the money to fight them?

  5. Finally someone who gets it. Forgot to mention though it particularly hurts when you know that your loss was illegal. And no one would do anything about it

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