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We already knew intuitively that the federal Emergency Unemployment Compensation program kept roofs over the heads of many jobless Americans who otherwise would have lost their homes. Now a new study by Joanne W. Hsu, David A. Matsa, and Brian T. Melzer at the National Bureau of Economic Research has quantified that rescue. They have concluded that 1.4 million home foreclosures didn't happen because the federal government provided compensation checks to people out of work for six months or more. The program was initiated in 2008 and renewed 11 times, but allowed to expire by congressional Republicans in December.

Bryce Covert reports:

Given that different states have different amounts they’ll pay out in unemployment benefits—in 2011 it ranged from $6,000 in Mississippi to $28,000 in Massachusetts—the researchers looked at what impact more generous benefits had on mortgage delinquency. They found that for every $1,000 extra in maximum benefits, the likelihood that an unemployed worker’s mortgage would go into delinquency declines by 25 basis points. Getting benefits for a longer period has a similar effect, as each additional week decreases the chance of delinquency by 34 basis points. “Based on this variety of tests, we conclude that the estimated effect of UI generosity is causal,” they write, meaning that bigger checks reduce the chances of going into delinquency directly.

They also found that the effect isn’t just a temporary forestalling of an inevitable foreclosure, but that it has a lasting impact on keeping people in their homes. “The effect seems to be long term,” they write, “as UI [unemployment insurance] benefits not only mitigate loan delinquency, but also reduce homeowner relocations and evictions.” Each additional $1,000 in benefits reduces the chance of an unemployed person’s mortgage going into default by 2.4 to 11 basis points. “We find that UI helps not only to postpone delinquency but also to keep laid off homeowners in their homes,” they conclude.

Extrapolating out from their findings, the authors estimate that the expansions in the unemployment benefits program during the recession prevented about 1.4 million foreclosures.

These data will not, of course, persuade Republicans in Congress that Americans subsisting on unemployment compensation aren't just lazing around watching cable movies every day instead of seeking a job. The fact that, even with an improving labor market, there are  two people for every job opening has zero impact on the wrongheaded views of these elected representatives.

Originally posted to Daily Kos Labor on Tue Aug 05, 2014 at 10:31 AM PDT.

Also republished by Daily Kos.

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Comment Preferences

  •  It certainly helped me (20+ / 0-)

    when I was unemployed in 2009-2010. Things would have been a lot more grim without those benefits.

    "The oppressors most powerful weapon is the mind of the oppressed." - Stephen Biko

    by gjohnsit on Tue Aug 05, 2014 at 10:37:31 AM PDT

    •  But you fail to understand.... (5+ / 0-)

      that the Tea Party and the GOP WANT people to go into bankruptcy and foreclosure.  

      Cuz when that happens, the banks and wealthy investors can buy up their properties on the open market at a deep discount (after the bankers stiff arm government programs designed to help mortgage holders in distress avoid foreclosure) and then turn around and rent them out and ultimately sell them at a handy profit.

      One of the biggest of these wealthy investor groups is Blackstone and Mother Jones has a detailed and grim saga of their actions in today's market of renting back the properties they swept up on the foreclosure market.

      Blackstone released history's first rated bond backed by securitized rental payments. And once investors tripped over themselves in a rush to get it, Blackstone's competitors announced that they, too, would develop similar securities as soon as possible.

      Depending on whom you ask, the idea of bundling rental payments and selling them off to investors is either a natural evolution of the finance industry or a fire-breathing chimera.

      "This is a new frontier," comments Ted Weinstein, a consultant in the real-estate-owned homes industry for 30 years. "It's something I never really would have dreamt of."

      However, to anyone who went through the 2008 mortgage-backed-security crisis, this new territory will sound strangely familiar.

      And as the Jones article further details, Blackstone is interested in making profits and NOT on the nitty gritty details of treating renters of its properties fairly:
      If you ask CaDonna Porter, a tenant in one of Blackstone's Invitation Homes properties in a suburb outside Atlanta, property management is exactly the skill that Blackstone lacks. "If I could shorten my lease—I signed a two-year lease—I definitely would," says Porter.

      The cockroaches and fat water bugs were the first problem in the Invitation Homes rental that she and her children moved into in September. Porter repeatedly filed online maintenance requests that were canceled without anyone coming to investigate the infestation. She called the company's repairs hotline. No one answered.

      The second problem arrived in an email with the subject line marked "URGENT." Invitation Homes had failed to withdraw part of Porter's November payment from her bank account, prompting the company to demand that she deliver the remaining payment in person, via certified funds, by five p.m. the following day or incur "the additional legal fee of $200 and dispossessory," according to email correspondences reviewed by TomDispatch.

      Porter took off from work to deliver the money order in person, only to receive an email saying that the payment had been rejected because it didn't include the $200 late fee and an additional $75 insufficient funds fee. What followed were a maddening string of emails that recall the fraught and often fraudulent interactions between homeowners and mortgage-servicing companies. Invitation Homes repeatedly threatened to file for eviction unless Porter paid various penalty fees. She repeatedly asked the company to simply accept her month's payment and leave her alone.

      "I felt really harassed. I felt it was very unjust," says Porter. She ultimately wrote that she would seek legal counsel, which caused Invitation Homes to immediately agree to accept the payment as "a one-time courtesy."

      Porter is still frustrated by the experience—and by the continued presence of the cockroaches. ("I put in another request today about the bugs, which will probably be canceled again.")

      A recent Huffington Post investigation and dozens of online reviews written by Invitation Homes tenants echo Porter's frustrations. Many said maintenance requests went unanswered, while others complained that their spiffed-up houses actually had underlying structural issues.

      Free markets would be a great idea, if markets were actually free.

      by dweb8231 on Tue Aug 05, 2014 at 01:50:23 PM PDT

      [ Parent ]

  •  If the Great Lakes Midwest Is Any Indicator, (14+ / 0-)

    the foreclosure crisis remains many times, maybe an order of magnitude, greater than the public consciousness imagines.

    Here in very middle middle income suburbs spread across one of the larger population regions of the country, in towns with neat appearances and no abandoned neighborhoods to catch the eye as in some minority-dominant cities that were attacked so visciously by fraudsters before the crash, you can drive miles and miles without ever going a block without passing a neat but empty house either unmarked, or with a small sheriff's sticker on a side door, or a for-rent sign out front.

    I don't think anybody knows how much property is presently in limbo.

    Evidently there's a lot of Chinese investment money building square miles of unoccupied business and housing towers and plazas around Vancouver Canada, real estate gambling basically for lack of productive use since the developed world masses have so little spending growth potential compared to the oceans of investment money concentrated in the hands of the global rich and their enterprises.

    All in all there's something going on around here that just don't add up.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Tue Aug 05, 2014 at 10:46:39 AM PDT

  •  To Republicans this is a BAD thing (8+ / 0-)

    American families being thrown out into the street warms the tiny Grinch-like heart of Republicans.

    "The Democrats and the Republicans are equally corrupt where money is concerned. It's only in the amount where the Republicans excel." ~ Will Rogers

    by Lefty Coaster on Tue Aug 05, 2014 at 10:48:56 AM PDT

  •  Another part of the plutocrats plan (7+ / 0-)

    is to turn us into a nation of renters.  That will be the final nail in the coffin of the American Dream.

    UC needs to extend for as long as someone is unemployed!  Why do politicians who rush to provide tax breaks and bail outs to corporations fail to recognize that very basic fact?

    There already is class warfare in America. Unfortunately, the rich are winning.

    by Puddytat on Tue Aug 05, 2014 at 11:20:09 AM PDT

    •  Adding insult to that injury of being unemployed (2+ / 0-)
      Recommended by:
      Puddytat, JG in MD

      is that the unemployed person has to pay taxes on his unemployment because some Republican included in a bill that no one read, the small caveat of determining that unemployment compensation was taxable income.

      So in getting unemployment benefits, the poor slob who loses his job is also going to have to take a hit for taxes on his unemployment check, which penalizes him TWICE.

      "Washington, DC: Where Corruption is Rewarded, and Ethical Merit is DESPISED.

      by The Truth on Tue Aug 05, 2014 at 01:35:47 PM PDT

      [ Parent ]

  •  Why do Republicans hate their fellow Americans? (3+ / 0-)
    Recommended by:
    HeyMikey, xxdr zombiexx, TKO333

    Why do Republicans hate their fellow Americans?

    •  Because their base is haters. (0+ / 0-)

      A big demographic.

      "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

      by HeyMikey on Tue Aug 05, 2014 at 11:37:04 AM PDT

      [ Parent ]

      •  Without realizing or caring (1+ / 0-)
        Recommended by:

        They are being condemned to lives as ill-paid and worse-protected service employees or servants, renters or even worse residents of a company town.

        Garrison Keillor had a parody during the early Bush years, "They're bringing the nineteenth century back again", which I cannot find, about the GOP. I remember "and bow when the great man passes by, 'cause they're bringing the 19th century back again."

        Just about sums it up.

      •  Yeah, not like the lovers here.... (0+ / 0-)

        Don't you just hate "haters".  I wish they would go jump off a cliff; those evil "haters".

        I hope none of us here have mirrors in our foreclosed-upon houses.

        Share the bitterness comrades.

    •  I thought the economy and jobs were doing so well? (2+ / 0-)
      Recommended by:
      jbcruz, AlexDrew

      UI is an insurance program.  Employers pay premiums every paycheck.  The premiums are calculated to fund a system whereby a laid off employee gets 26 weeks.  That's it.

      The extended UI was an emergency measure.  Emergency measures have a built in implication that they are temporary.

      Every week MB publishes a diary on the economy and jobs and tons of commenters are jumping for joy how well the "recovery" is doing.

      Well, which is it?  Are we still in a crisis or is the Obama administration behind one of the "biggest recoveries since WW II" as some of those commenters would have you believe?

      Because Repubs don't want to borrow more money they hate their fellow Americans?  Do you think money grows on trees?  That the only thing keeping the money from flowing out to the unemployed is the hatefullness of Repubs?

      The Obama admin has saddled this country with over $7 Trillion in new debt in the last five years.  A lot of it was necessary to pull out of the worst recession - which officially ended 5 years ago.

      Some of us even who aren't Republicans don't think borrowing on that scale can last forever.

      •  It's a 2 state American economy (5+ / 0-)

        One state is the Stock Market. That one is doing gangbusters.

        The other state is the Jobs Market. That one is still staggering along with at least two job seekers for every job available.

        So it's both, at the same time.

        When it comes to borrowing and debt?

        Bill Clinton, for all of his foibles, proved that the Republican approach to Federal borrowing and spending (which is that all borrowing is wrong, wrong, wrong - unless it's for War) is simply not factual or based on reality.

        When the public economy is staggered and no one is spending, it starts a cycle of less jobs, less money, less spending, less jobs....  in which case, the Government is the spender of last resort.

        The money spent by the Federal government is eventually made up when the economy recovers, jobs are produced and tax revenues climb in reaction. It's how Bill left George some black ink on the balance books.

        Which George promptly spent like a drunken sailor.

        "I like paying taxes...with them, I buy Civilization"

        by Angie in WA State on Tue Aug 05, 2014 at 12:08:33 PM PDT

        [ Parent ]

        •  2 state economy. (1+ / 0-)
          Recommended by:
          Angie in WA State

          Sams for the Rich, Wal Mart for the Poor.




          Front Door / Back Door

          The prospect of a separate entrance for lower-income residents has been circulating for some time, but as the New York Post reported today, plans by company Extell Development to put a separate entrance for affordable housing tenants, who make 60 percent or less of median income, in the 33-story condo have been given the green light. The property will have 219 units, including 55 affordable units overlooking the street. Those renting and buying the apartments at the market-rate will have waterfront views.
          Of Course.

          Grey Poupon extra.

          (Grey Poupon/ Frenchs)

      •  In 10 states, the laid-off employee... (3+ / 0-)
        Recommended by:
        TKO333, joedemocrat, gramofsam1 longer gets 26 weeks. S/he can get as few as 14, in fact.

        As for saddling, I think it behooves you to look a bit deeper at the whole range of what generated that new debt instead of just figuring how much it rose in the past 5 1/2 years.

        Much of the acute crisis of the Great Recession is now over, or at least much improved. Even so, the number and percentage of long-term unemployed the federal EUC was set up to help is still historically high, especially so long after the official end of the recession.

        The chronic economic crisis—globalization and outsourcing, stagnant wages, skewed tax policy, to name a few—continue hammering at Americans not in the top tiers.

        Don't tell me what you believe, show me what you do and I will tell you what you believe.

        by Meteor Blades on Tue Aug 05, 2014 at 12:24:29 PM PDT

        [ Parent ]

        •  I said: "A lot of it was necessary" (1+ / 0-)
          Recommended by:
          A lot of it was necessary to pull out of the worst recession - which officially ended 5 years ago.
          I don't blame Obama for anywhere near all of that.

          But I do not credit him for improving it, because he done nothing to do that.

          The natural recovery of the economy has been the cause of 100% of the reduction in deficit spending.  This administration has done nothing to spur economic growth.

          Now, I fully recognize the intransigent GOP has blocked any of Obama's attempts at stimulating this economy.  But, we differ in the manner of how this economy should be stimulated.

          The current view of progressives is to dump money into the economy via public works projects.  I'm not against that.  We need infrastructure improvements all over that could provide a temporary benefit to the economy.

          But we saw with the stimulus, it is very fleeting.

          Along with infrastructure investment, we need a concerted attempt to bring back manufacturing and assembly jobs back to this country.

          Only a blind man cannot see what happens when local economies boom.  Look at North Dakota with its fracking boom.  Lets put the ecological impacts aside for a minute.  It demonstrates what a boom in an industry does for a local economy.

          Wages skyrocket.  There is no need for a minimum wage.

          There are shortages... shortages of housing, goods, etc. etc.. all leading to further economic activity.

          Gov't revenues increase dramatically.  More people working means more tax revenues - at all levels - local, state and federal.

          Yet Democrats throw all that aside for advocating for more government assistance.

          We are not facing the right problems.  Our focus should be twofold.  Help those out of work retrain for jobs of the future.

          But bring back the jobs to American shores.  Generate new tax revenues through jobs, and invest in infrastructure.

          Globalization IS the big problem.  Become competitive and bring those jobs back.  Make it harder for companies to take their jobs overseas.  And make it easier to bring them back.

          •  I agree with a fair chunk of what you've said... (1+ / 0-)
            Recommended by:

  , particularly investment in infrastructure, something I have been relentlessly arguing for in print since 1978.

            But I don't agree that the administration has done nothing in this regard nor do I agree that "natural recovery" occurred without government stimulus. The CBO doesn't agree with you either.

            In fact, thanks in part to Obama's policies, we have seen significant growth in renewable sources of energy. He's done more for that than any president since Jimmy Carter. (I'm not fond of other elements of his energy policy, but this one he got right.)

            As for North Dakota, what you've got going there is a boom economy all right. And what we'll see no too long from now is the bust. The Western U.S. has a history of this boom-bust cycle based on natural resources. The bust part of the cycle is none-too-pretty.

            Don't tell me what you believe, show me what you do and I will tell you what you believe.

            by Meteor Blades on Tue Aug 05, 2014 at 06:34:20 PM PDT

            [ Parent ]

      •  Straw man. (0+ / 0-)

        Where did that quote come from?

        First, it's likely not better in any way than some other recovery since WW II.  That was a long time ago.

        Second, it's the longest since 1994 or so, not the "biggest."

        We're growing more than 200,000 jobs/month.  We need most of that just to stand still.

        There are TWO things "keeping the money flowing out to the unemployed."  Hatefulness of Repubs and ignorance of economics of Democrats.

        "...we live in the best most expensive third world country." "If only the NEA could figure out all they have to do is define the ignorance of the next generation as a WMD..." ---Stolen from posts on Daily Kos

        by jestbill on Tue Aug 05, 2014 at 02:08:03 PM PDT

        [ Parent ]

    •  Their agenda is to thin the herd. (0+ / 0-)

      There are just too many Americans.

      This country is for rich people who deserve it.

      Not moochers.

      Plus everybody is polite so republicans don't fear people like they should.

      If they feared people or "consequences" things would be quite different.

      Like Rand Paul having to talk to a non-white.

  •  But How many have since lost their homes and (0+ / 0-)

    everything since December 2013, because these ReThugs haven't bothered to pass an extension of benefits in nine months?

    Cue the Crickets chirping...

    "Washington, DC: Where Corruption is Rewarded, and Ethical Merit is DESPISED.

    by The Truth on Tue Aug 05, 2014 at 01:33:32 PM PDT

  •  And republicans work so ahrd to PREVENT (0+ / 0-)

    people from getting it.

    Which means republicans want you to fail, they want you to lose your home, they want you poor, if not poverty-stricken.

    They want to prevent you from getting healthcare.

    And still people insist on being polite to them.

    it's breathtaking. It's a measure of exactly how good the MSM does its job.... the actual job they are designed for now, not "actual journalism".

    This is what is slowing down the inevitable.

  •  Extend Aid to Israel (1+ / 0-)
    Recommended by:

    And let American suffer ,while they support Israel wars

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