Just the facts, from the Los Angeles Times:
For the first quarter ever, the number of homes in foreclosure with mortgages serviced by U.S. national banks and savings and loans topped the 1-million mark, according to figures released Monday by the Office of Thrift Supervision and the Office of the Comptroller of the Currency.
The percentage of prime borrowers whose loans were 60 or more days past due doubled from the July-to-September period a year earlier. And more than half of all homeowners whose payments had been lowered through modification plans defaulted again.
The report, which covers about 34 million loans, or about 65% of all U.S. mortgages, underscores the obstacles to strengthening the nation's rickety housing market. Stubborn unemployment is making it tough for millions of homeowners to pay their debts. In addition, many people whose monthly installments have been lowered still are unable to keep up with their payments.
This is the second wave that many economists predicted. The first was from bad loans. This one is from no jobs. Not surprisingly, hunger and family homelessness also are on the rise.
According to a new report by the U.S. Conference of Mayors (pdf):
The mayors‟ report shows that on average, the need for emergency food assistance increased by 26 percent from last year. Cities also reported an increase in food requests from middle class households that used to donate to food pantries, as well as an increase in the frequency of repeat requests from those needing help. When asked to report on the three main causes of hunger, respondents cited unemployment, housing costs and low wages respectively.
To combat hunger, many cities have instituted programs to address the challenge over the long term. Examples of successful initiatives include gleaning food that would otherwise go to waste to supply food banks; programs that serve children during the summer and on weekends when they are not receiving subsidized meals at school; food banks offering greater diversity of foods to serve a diverse cultural-client base; and food pantries that help recipients to determine their eligibility for food stamps. When looking to 2010, cities anticipate having a difficult time meeting the high demand for food assistance in the future because of high unemployment and high costs of living, in addition to the impact of state and local budget cuts.
And:
In the area of homelessness, nineteen cities (76 percent), reported an increase in family homelessness, while homelessness among individuals decreased or stayed the same for 16 of the 25 cities (64 percent). Most of the cities that experienced drops in individual homelessness attribute the decline to a policy strategy by federal, state and local governments of instituting 10-year plans to end chronic homelessness among single adults. Not surprisingly, the recession and a lack of affordable housing were cited as the top causes of family homelessness in the surveyed cities.
Federal help is helping, but clearly not enough:
This year‟s survey takes into account several programs which provide additional funding to fight hunger and homelessness through the American Recovery and Reinvestment Act of 2009 (ARRA). Those programs include: The Emergency Food and Shelter Program (EFSP), the Neighborhood Stabilization Program (NSP) and The Homeless Prevention and Rapid Re-Housing Program (HPRP), and the Emergency Food Assistance Program (TEFAP).
According to the survey, cities are using funding from the HPRP to develop central intake systems for homeless services, coordinate services more closely with surrounding areas, or offer homeless prevention assistance for the first time. Of note, eighteen cities reported that the HPRP will „fundamentally change the way [their] community provides services to people who are homeless or at risk of homelessness.‟ The stimulus package was also a key factor in the increase in the amount of food distributed over the past year. Three quarters (76 percent) of surveyed cities received additional funding for the EFSP through the Recovery Act, and 55 percent of the cities received TEFAP funding through their states enabling the purchase of additional commodities to serve people in need of food assistance.
And, of course, the Senate again extended unemployment benefits. But, of course, federal assistance to the homeless and extending unemployment benefits are fixing the effects, not the cause. Which the House of Representatives just voted down doing something about.
Bloomberg, on December 11:
The U.S. House rejected a mortgage "cram-down" amendment that would have given federal judges the power to lengthen mortgage terms, cut interest rates and reduce loan balances for homeowners in bankruptcy court.
Lawmakers voted 241-188 today against the amendment, which was to be part of broader legislation reining in excessive risk taking on Wall Street. All but four of the Republicans who voted opposed the amendment, pulling with them 71 Democrats to defeat the measure.
The bill had been sponsored by Democratic Representatives John Conyers and Barney Frank, but a whopping 71 of their colleagues decided to do the bidding of the banks rather than help those losing their homes.
The cram-down provision was identical to legislation that passed the House in March and then failed in the Senate amid opposition from the banking industry...
Lenders are "gratified that the House saw fit to vote down the bankruptcy cram-down amendment that would have further increased costs for borrowers," the Washington-based Mortgage Bankers Association, the industry’s largest trade group, said in a statement today.
And as for those poor little banks, Barry Ritholtz has this little nugget:
Banks with strong political connections were more likely to receive bailout money from the government — and more of it — in the past year than those with weaker ties, say Ross researchers.
A new study by Ross professors Ran Duchin and Denis Sosyura found that banks with connections to members of congressional finance committees and banks whose executives served on Federal Reserve boards were more likely to receive funds from the Troubled Asset Relief Program, the federal government's program to purchase assets and equity from financial institutions to strengthen its financial sector.
Further, their research shows that TARP investment amounts were positively related to banks' political contributions and lobbying expenditures, and that, overall, the effect of political influence was strongest for poorly performing banks.
Government of, by, and for... ?