A decade ago, Metro Detroit had the lowest foreclosure rate of any metropolitan area in the country. By the end of 2006, we had the highest foreclosure rate, four times the national average. Disproportionately, this is felt by minority members, half of whom have “subprime” loans. Pushing these risky, complex loans without honestly disclosing the risks is predatory, and seemingly commonplace.
Znet commentator Carl Bloice argues that discussions of the current real estate free-fall focus too much on the overall health of the “market” and not enough on the overall health of the people:
More often than not, the concern is expressed over the possible affect the foreclosure developments will have on the banks and lending companies that made the loans and on the general health of the economy. Little concern is expressed over the fate of the borrowers. This is, of course, consistent with the reigning ideology: the ‘market economy’ carries risks and a rising tide lifts all boats. The reality is, only some boats are rising and the passengers on others are being left to sink or swim in unfathomable waters. If there is anything working people in our country are not being offered it’s any (in the Fed chair’s words) ‘insurance against the most adverse economic outcomes, especially those arising from events largely outside the person’s control.”
Bloice leaves the nuts-and-bolts of “foreclosure relief” unexplored, but it’s worth thinking about. After 9/11 the federal government bailed out the airlines at taxpayers expense. The stated justification was to prevent a collapse in an integral transportation service (a great deal of American business absolutely hinges on our extensive airline service.) Is protecting the financial viability of the primary consumers — who must be the backbone of a service/retail economy — any different?