By Kevin Chiu
It’s a new kind of war as homeowners battle with the bank. Call it the housing war, and it rocks at the emotions of the rich and poor alike.
Triggered by the financial crisis, banks and mortgage lenders can’t keep up with the back log of mortgage holders in default, battling to “throw the bums out” of their homes. Millions of mortgage holders are trapped in a bizarre sort of war pitting homeowners against bankers living in homes they are no longer paying mortgages on, wondering and worrying when they’ll get thrown out.
The phenomenon is a massive change from real estate collapses except dating back to the Great Depression when tenants and homeowners were thrown into the streets without a place to call home.
Thanks to Congress tenants now have up to six months to move out of homes that are foreclosed, but tenants are usually “bribed” by banking representatives to move-out sooner with up to $3,000 in cash to find another rental.
Mortgage holders have lived in homes in California, Florida, Michigan and Ohio for as long as two years without making a payment. “I’d like to break the bank,” said Gary Sutton, who lives in a Cleveland, Ohio home he hasn’t made a payment on in 19 months. “They lent me money and promised I’d be able to refinance this damn home and then started the foreclosure. There’s no way they’ll refinance it now. It’s down 70%!”
Sutton is representative of a growing segment of Americans, who put their faith in the American dream of homeownership only to run into financial mayhem. The Obama administration has implemented a series of programs to aid those caught in the nightmare, but the programs success has been limited.
A near riot broke out in Atlanta, Georgia last week after a group of desperate homeless people who were promised housing vouchers waited hours in heat topping 105 degrees. Atlanta police said only a few in “the mob” were injured as a result of violence that broke out over the vouchers.
The troubles over housing has also resulted in higher crime in many areas of the country as a war of housing rights issues and mortgage holders being kicked-out of their homes surfaces in an assortment of ways.
However, problems aren’t limited to only poor areas or communities. The rich are also fighting back against bankers. In Florida, where more homes and condos are owned by out-of-state owners than any where else in the country 60% of all mortgages are in default. Other especially hard hit areas of the country have near similar rates.
The foreclosure crisis has led to limited success in the Obama administration’s Making Home Affordable Program. Critics say loan modifications are difficult to get from most banks and mortgage companies since the program is only voluntary for bankers.