[Hpn] Marriages, families, tax revenues fall victim to wave of foreclosures

William C. Tinker wtinker@verizon.net
Mon, 17 Dec 2007 04:39:21 -0500


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Mortgage crisis inflicts collateral damage
Marriages, families, tax revenues fall victim to wave of foreclosures
http://www.msnbc.msn.com/id/22246203
By Alex Johnson
Reporter
MSNBC

Thurs., Dec. 13, 2007=20
The national surge in mortgage defaults is claiming more victims than =
just the thousands of subprime borrowers facing the prospect of losing =
their homes.=20

Social service agencies say homeless rates are on the rise not only as =
families lose their own homes to foreclosure but also as renters are =
evicted after their landlords default. Financial analysts warn that =
state and local governments will soon feel the pinch of sharply reduced =
property tax revenue. And counselors say divorces and reports of abuse =
are rising as families burdened by impending foreclosure take their =
stress out on one another.

The ripple effect illustrates the wide-ranging impact the subprime =
mortgage crash has had not only on the U.S. economy but on society at =
large, said Robert Reich, who was labor secretary during the Clinton =
administration.

"Understand that houses are the most important assets most Americans =
have, and they are seeing those assets disappear," Reich said.

Little recourse for renters
Especially hard hit are families that rent their homes from landlords =
facing foreclosure. RealtyTrac, a national real estate network that =
specializes in foreclosed properties, estimates that more than 20 =
percent of foreclosures involve investment properties; when landlords =
lose those properties, their tenants lose a roof over their heads with =
little warning.

Mona Hoeft, a rental assistance technician with the Olmsted County =
Housing and Redevelopment Authority in Rochester, Minn., said her agency =
was being swamped with calls for help from families who were being =
tossed out on the street.=20


"Unfortunately, there's not much a tenant can do other than move," Hoeft =
said. "There really is no protection for the tenant."

Congress is considering a measure to require landlords to give tenants =
90 days' notice before they can be evicted. But even if it passes, it =
will not be in time to help thousands of renters like Sharron Shagonaby, =
67, who was never late on the $900-a-month rent she paid on a house in =
Holland, Mich. She was forced out two weeks ago when her landlord =
defaulted on his loan.

"I just can't see how people are so cold that they would actually put me =
out on the street when I didn't buy the house," said Shagonaby, who uses =
an oxygen tank and is debilitated by diabetes.

"I didn't forfeit my payment," said Shagonaby, but she fears that she =
will have trouble finding a new place to live.

"People that you apply to for a house won't believe that," she said. =
"They won't even look at if you were really evicted - [they think] =
you're just making up some story."

Shelters feel the stress
Darryl Bartlett, executive director of the Holland Rescue Mission for =
Women, called Shagonaby an example of "a new kind of homeless - those =
that are the innocent victims."

"We did not plan for large numbers of people who are being foreclosed on =
becoming homeless," Bartlett said. "That was not in our plan."

Eugene and Kathleen Pobol were packing up their rental home this week in =
Bakersfield, Calif., after getting an eviction notice.

"We're between a rock and a hard place, and basically we're up the creek =
without a paddle," Eugene Pobol said.



"Here we are, tenants, paid our rent on time, went through credit checks =
and everything else, and now, all of a sudden, the landlord's going bad =
on a mortgage," he said.

Officials at the Bakersfield homeless shelter said they were at capacity =
but that more families wanted in. The shelter took in seven families in =
one day this week, said Louis Gill, the shelter's executive director.

"I'm definitely concerned now that we're receiving phone calls from =
people going through foreclosure," Gill said. "We'll have to see what =
kind of additional burden that puts on the emergency systems."

Local governments under the hammer
Government agencies that can help stricken families are also facing a =
bind, economists said, because the high number of foreclosures removes =
property tax payers from the rolls.

"The housing market has put a big negative for local government revenues =
across the board," said Stephen Levy, director of the Center for =
Continuing Study of the California Economy in Palo Alto.

The nonprofit Center for Responsible Lending said California could lose =
nearly $3 billion in property tax revenue and another $1 billion in =
sales and transfer tax revenue thanks to foreclosures. =20

"Property tax revenues are going to be a lot less than local governments =
built into their budgets, and there are going to be tough times at the =
local level," Levy said.

Atlanta City Council member Mary Norwood said property tax revenues =
would also take a hit because foreclosed homes drive down property =
values in a neighborhood, leading to lower assessments on people who do =
pay up. The Center for Responsible Lending put that price tag at more =
than $17 billion nationwide.

"You have a lot of vandalism, the house deteriorates, that drags down =
the neighborhood," Norwood said. "It affects the property values of the =
other homeowners in the community."

Families under siege
The stress of dealing with threatened foreclosure is also taking a =
serious toll on families.=20

"It just gets pulled right out from underneath you," said Wendy Hatt, =
whose marriage broke up under the strain of dealing with the prospect of =
losing the family's home in Tucson, Ariz.=20

Hatt's real estate agent, Amado Calderon, said homeowners squeezed by =
the mortgage crisis were left at sea.

"It's one of the most stressful situations for couples, for homeowners," =
Calderon said. "They really don't know their options."

At the Women's Center of San Joaquin County in Stockton, Calif., calls =
to the domestic abuse hot line have jumped 12 percent in recent weeks, =
fueled largely by the strain on families losing their homes, said Joelle =
Gomez, the center's director.



"If they're not dealing with the stress or talking to somebody about it, =
it is going to escalate and come out in forms of violence," Gomez said.

Vivian Ward, a hot line counselor at the center, said families simply =
run out of money even as they watch their mortgage rates climb.

"A lot of times the abuse starts because they don't have enough money to =
make those mortgage payments," she said. "They're so high."

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<H1>Mortgage crisis inflicts collateral damage</H1>
<H2>Marriages, families, tax revenues fall victim to wave of =
foreclosures
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href=3D"http://www.msnbc.msn.com/id/22246203">http://www.msnbc.msn.com/id=
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<DIV class=3DmR165>
<DIV>
<DIV class=3DtextMedBlackBold>By Alex Johnson</DIV>
<DIV class=3DtextMedBlack>Reporter</DIV>
<DIV class=3DtextMedBlack>MSNBC</DIV>
<DIV class=3DtextMedBlack>&nbsp;</DIV>
<DIV class=3DtextTimestamp><SPAN id=3DudtD><SPAN class=3Ddate>Thurs., =
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<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>The national surge in =
<A class=3DiAs=20
style=3D"FONT-WEIGHT: normal; FONT-SIZE: 100%; PADDING-BOTTOM: 1px; =
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href=3D"http://www.msnbc.msn.com/id/22246203#" target=3D_blank=20
itxtdid=3D"4113326">mortgage defaults</A> is claiming more victims than =
just the=20
thousands of subprime borrowers facing the prospect of losing their =
homes. </P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>Social service =
agencies say=20
homeless rates are on the rise not only as families lose their own homes =
to=20
foreclosure but also as renters are evicted after their landlords =
default.=20
Financial analysts warn that state and local governments will soon feel =
the=20
pinch of sharply reduced <A class=3DiAs=20
style=3D"FONT-WEIGHT: normal; FONT-SIZE: 100%; PADDING-BOTTOM: 1px; =
COLOR: darkgreen; BORDER-BOTTOM: darkgreen 0.07em solid; =
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href=3D"http://www.msnbc.msn.com/id/22246203#" target=3D_blank=20
itxtdid=3D"3764899">property tax</A> revenue. And counselors say =
divorces and=20
reports of abuse are rising as families burdened by impending =
foreclosure take=20
their stress out on one another.</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>The ripple effect =
illustrates the=20
wide-ranging impact the subprime mortgage crash has had not only on the =
U.S.=20
economy but on society at large, said Robert Reich, who was labor =
secretary=20
during the Clinton administration.
<SCRIPT =
type=3Dtext/javascript>dap('&PG=3DNBCRL3&AP=3D1089','300','250');</SCRIPT=
>
</P><A id=3DAdShowcase_F2 name=3DstoryContinued></A>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>=93Understand that =
houses are the=20
most important assets most Americans have, and they are seeing those =
assets=20
disappear,=94 Reich said.</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN><B><STRONG>Little =
recourse for=20
renters<BR></STRONG></B>Especially hard hit are families that rent their =
homes=20
from landlords facing foreclosure. RealtyTrac, a national <A class=3DiAs =

style=3D"FONT-WEIGHT: normal; FONT-SIZE: 100%; PADDING-BOTTOM: 1px; =
COLOR: darkgreen; BORDER-BOTTOM: darkgreen 0.07em solid; =
BACKGROUND-COLOR: transparent; TEXT-DECORATION: underline"=20
href=3D"http://www.msnbc.msn.com/id/22246203#" target=3D_blank=20
itxtdid=3D"3761207">real estate</A> network that specializes in =
foreclosed=20
properties, estimates that more than 20 percent of foreclosures involve=20
investment properties; when landlords lose those properties, their =
tenants lose=20
a roof over their heads with little warning.</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>Mona Hoeft, a rental =
assistance=20
technician with the Olmsted County Housing and Redevelopment Authority =
in=20
Rochester, Minn., said her agency was being swamped with calls for help =
from=20
families who were being tossed out on the street. </P>
<DIV>&nbsp;</DIV>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>=93Unfortunately, =
there=92s not much a=20
tenant can do other than move,=94 Hoeft said. =93There really is no =
protection for=20
the tenant.=94</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>Congress is =
considering a measure=20
to require landlords to give tenants 90 days=92 notice before they can =
be evicted.=20
But even if it passes, it will not be in time to help thousands of =
renters like=20
Sharron Shagonaby, 67, who was never late on the $900-a-month rent she =
paid on a=20
house in Holland, Mich. She was forced out two weeks ago when her =
landlord=20
defaulted on his loan.</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>=93I just can=92t see =
how people are=20
so cold that they would actually put me out on the street when I =
didn=92t buy the=20
house,=94 said Shagonaby, who uses an oxygen tank and is debilitated by=20
diabetes.</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>=93I didn=92t forfeit =
my payment,"=20
said Shagonaby, but she fears that she will have trouble finding a new =
place to=20
live.</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>=93People that you =
apply to for a=20
house won=92t believe that,=94 she said. =93They won=92t even look at if =
you were really=20
evicted =97 [they think] you=92re just making up some story.=94</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN><B><STRONG>Shelters =
feel the=20
stress<BR></STRONG></B>Darryl Bartlett, executive director of the =
Holland Rescue=20
Mission for Women, called Shagonaby an example of =93a new kind of =
homeless =97=20
those that are the innocent victims.=94</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>=93We did not plan for =
large numbers=20
of people who are being foreclosed on becoming homeless,=94 Bartlett =
said. =93That=20
was not in our plan.=94</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>Eugene and Kathleen =
Pobol were=20
packing up their rental home this week in Bakersfield, Calif., after =
getting an=20
eviction notice.</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>=93We=92re between a =
rock and a hard=20
place, and basically we=92re up the creek without a paddle,=94 Eugene =
Pobol=20
said.</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN></P>
<P></P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>=93Here we are, =
tenants, paid our=20
rent on time, went through credit checks and everything else, and now, =
all of a=20
sudden, the landlord=92s going bad on a mortgage,=94 he said.</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>Officials at the =
Bakersfield=20
homeless shelter said they were at capacity but that more families =
wanted in.=20
The shelter took in seven families in one day this week, said Louis =
Gill, the=20
shelter=92s executive director.</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>=93I=92m definitely =
concerned now that=20
we=92re receiving phone calls from people going through foreclosure,=94 =
Gill said.=20
=93We=92ll have to see what kind of additional burden that puts on the =
emergency=20
systems.=94</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN><B><STRONG>Local =
governments under=20
the hammer<BR></STRONG></B>Government agencies that can help stricken =
families=20
are also facing a bind, economists said, because the high number of =
foreclosures=20
removes <A class=3DiAs=20
style=3D"FONT-WEIGHT: normal; FONT-SIZE: 100%; PADDING-BOTTOM: 1px; =
COLOR: darkgreen; BORDER-BOTTOM: darkgreen 0.07em solid; =
BACKGROUND-COLOR: transparent; TEXT-DECORATION: underline"=20
href=3D"http://www.msnbc.msn.com/id/22246203/page/2/#" target=3D_blank=20
itxtdid=3D"3764899">property tax</A> payers from the rolls.</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>=93The <A class=3DiAs=20
style=3D"FONT-WEIGHT: normal; FONT-SIZE: 100%; PADDING-BOTTOM: 1px; =
COLOR: darkgreen; BORDER-BOTTOM: darkgreen 0.07em solid; =
BACKGROUND-COLOR: transparent; TEXT-DECORATION: underline"=20
href=3D"http://www.msnbc.msn.com/id/22246203/page/2/#" target=3D_blank=20
itxtdid=3D"3758790">housing market</A> has put a big negative for local =
government=20
revenues across the board,=94 said Stephen Levy, director of the Center =
for=20
Continuing Study of the California Economy in Palo Alto.</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>The nonprofit Center =
for=20
Responsible Lending said California could lose nearly $3 billion in =
property tax=20
revenue and another $1 billion in sales and transfer tax revenue thanks =
to <A=20
class=3DiAs=20
style=3D"FONT-WEIGHT: normal; FONT-SIZE: 100%; PADDING-BOTTOM: 1px; =
COLOR: darkgreen; BORDER-BOTTOM: darkgreen 0.07em solid; =
BACKGROUND-COLOR: transparent; TEXT-DECORATION: underline"=20
href=3D"http://www.msnbc.msn.com/id/22246203/page/2/#" target=3D_blank=20
itxtdid=3D"4251921">foreclosures</A>.&nbsp;&nbsp;
<SCRIPT =
type=3Dtext/javascript>dap('&PG=3DNBCRL3&AP=3D1089','300','250');</SCRIPT=
>
</P><A id=3DAdShowcase_F2 name=3DstoryContinued></A>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>=93Property tax =
revenues are going=20
to be a lot less than local governments built into their budgets, and =
there are=20
going to be tough times at the local level,=94 Levy said.</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>Atlanta City Council =
member Mary=20
Norwood said property tax revenues would also take a hit because =
foreclosed=20
homes drive down property values in a neighborhood, leading to lower =
assessments=20
on people who do pay up. The Center for Responsible Lending put that =
price tag=20
at more than $17 billion nationwide.</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>=93You have a lot of =
vandalism, the=20
house deteriorates, that drags down the neighborhood,=94 Norwood said. =
=93It affects=20
the property values of the other homeowners in the community.=94</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN><B><STRONG>Families =
under=20
siege<BR></STRONG></B>The stress of dealing with threatened foreclosure =
is also=20
taking a serious toll on families. </P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>=93It just gets pulled =
right out=20
from underneath you,=93 said Wendy Hatt, whose marriage broke up under =
the strain=20
of dealing with the prospect of losing the family=92s home in Tucson, =
Ariz. </P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>Hatt=92s real estate =
agent, Amado=20
Calderon, said homeowners squeezed by the mortgage crisis were left at =
sea.</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>=93It=92s one of the =
most stressful=20
situations for couples, for homeowners,=94 Calderon said. =93They really =
don=92t know=20
their options.=94</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>At the Women=92s =
Center of San=20
Joaquin County in Stockton, Calif., calls to the domestic abuse hot line =
have=20
jumped 12 percent in recent weeks, fueled largely by the strain on =
families=20
losing their homes, said Joelle Gomez, the center=92s director.</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN></P>
<P></P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>=93If they=92re not =
dealing with the=20
stress or talking to somebody about it, it is going to escalate and come =
out in=20
forms of violence,=94 Gomez said.</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>Vivian Ward, a hot =
line counselor=20
at the center, said families simply run out of money even as they watch =
their=20
mortgage rates climb.</P>
<P class=3DtextBodyBlack><SPAN id=3DbyLine></SPAN>=93A lot of times the =
abuse starts=20
because they don=92t have enough money to make those mortgage =
payments,=94 she said.=20
=93They=92re so high.=94</P></DIV></DIV></DIV></BODY></HTML>

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