ECONOMY - Foreclosures

Greed Files

"Get ready for another round of the foreclosure crisis" PBS NewsHour 3/5/2015

Excerpt

SUMMARY:  Despite what you might have heard, the foreclosure crisis is far from over.  Economics correspondent Paul Solman talks to people in Florida who have lost their homes, and considers whether a wave of new foreclosures is on the horizon.

JUDY WOODRUFF (NewsHour):  One of the gaping wounds of the housing crisis and the great recession that immediately followed it was a huge jump in the number of foreclosures in cities and regions around the country.

In many ways, the housing market today is healthier.

But, as our economics correspondent Paul Solman tells us, that painful wound still stings in a number of communities.  His story is part of our ongoing reporting Making Sense, which airs every Thursday on the NewsHour.

MARC JOSEPH, Real Estate Agent:  What I need to do with you now is, I need to walk through the house to make sure it’s broom-swept condition.

PAUL SOLMAN (NewsHour):  Despite what you may have heard, the foreclosure crisis is far from over, especially in Florida, which leads the nation, more than 300,000 cases still pending, another half-a-million homeowners delinquent, hundreds of thousands of modified loans about to balloon in payments.

Ten days ago, David — we have been asked not to use his last name — was in the final stage of the process, cash for keys.  He’d bought this house on a quiet street in Fort Myers in 2007 for $139,000 to live in with his brother and parents.  His father died soon after.

MARC JOSEPH:  By signing this, you are hereby releasing all claims.  If you come back to this property, it’s considered trespassing.

PAUL SOLMAN:  For a while, brothers and mother pooled their incomes from low-level jobs and her widow’s pension to make the monthly payment.  Then, one day in 2010, David came home to find that his mother, in her late 50s, had had a near-fatal heart attack.

DAVID, Florida:  I had to take care of her. My brother works.  I couldn’t work.  I had to take care of her.

PAUL SOLMAN:  With no health insurance — this was pre-Obamacare — the family fell behind.  Their original mortgage servicing company, Litton, agreed to modify the loan, reducing the interest rate, but not the principal, to cut payments by a third.

Two months later, though, Litton transferred the loan to Green Tree.

DAVID:  Green Tree took over.  The mortgage just started going up.  And my 401(k), my bank account, my car that — the only car that I bought myself, an ’03 Monte Carlo, brand-new, I had to get rid of that to pay for the mortgage.