Over the past two years, we’ve been told to expect a silver lining to the housing crisis. At a first glance, the release of tomorrow’s foreclosure numbers should add to that optimism, as analysts expect the number of new foreclosures to drop dramatically. But does that mean we’ve truly passed the worst moments of the housing crisis?
Louise Story, Wall Street and finance reporter for our partner The New York Times, helps us get behind the numbers. And for a personal look at the impact the housing crisis continues to have across the country, we speak with Aaron Timlin, executive director of the Contemporary Art Institute of Detroit. Aaron's home was foreclosed upon when his non-profit work could no longer pay his salary.
We also speak with Susan Radke, from Dearborn, Mich., who may face foreclosure soon, as her property is falling underwater, and hear from estate agent Behrooz Shahidi, who gives us his own take on the housing market.
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The show is a co-production of WNYC Radio and Public Radio International, in collaboration with New York Times Radio and WGBH Boston.
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Comments [4]
As a residential real estate attorney, lifelong resident, former mayor pro tem and three term council member in Ferndale, Michigan I feel compelled to provide some context to the comments made about my city.
Not all Ferndale homes are selling for pennies on the dollar and values in some areas of the city are holding up quite well compared to neighboring cities. Unfortunately homes in the most distressed neighborhoods of Ferndale, on our southern and eastern borders, are 2 or 3 bedroom homes on a slab or a crawl and without a garage. A typical starter home for our community. As lending standards have tightened, the demand for these homes has disappeared and prices have dropped. Homes that were previously owner occupied are being purchased by investors for cash, then significantly renovated and rented to Wayne State University students and middle class residents from Detroit. The result has been, in many instances, including on my street, to improve the housing stock and create stronger community.
Times are tough in Metro Detroit, but we are fighters and with a strong DIY work ethic and a burgeoning creative class Ferndale the future looks bright despite the current storm.
We really must assure continuation of the Bush tax breaks! - otherwise how will wealthy Americans be able to scoop up all the foreclosed homes of the middle class at bargain basement prices???? We don't want to let Chinese & Saudi debt holders to get their hands on American real estate - do we????
The RTC came in a shut down companies, much like the FDIC is doing with smaller institutions. Many of the companies that originated these bad loans are already gone and the larger banks who bought them are left with the mess. The huge number of mortgages that were originated with the big banks aren't much better though and even though the government is willing to give them loans, they're pretty reluctant to shut down banks such as Chase or Bank of America because of the huge repercussions for the rest of the account holders. It's a huge mess and it was (is?) a vicious cycle. People who desperately needed the loans were given loans they shouldn't have, but so did people who full well knew they were way over their head, mortgaging their houses for 2 or even 3 times the value of the house, with the help of an appraiser willing to give a higher value for a fee. The banks, and the closing agents (we even had a run in with a couple of them who somehow had to give us a different interest rate at the closing and upon closer inspection, changed information we put on the applications - we walked out of the closings) were very anxious to make money off the new loans, without looking at the long term effects.
In the 1990's the RTC stepped in and straightened out the mess. Why no RTC this time? The private lenders have proven to be inexperienced and incompetent to clean up their own mess.
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