-----Original Message----- From: lbo-talk-bounces at lbo-talk.org [mailto:lbo-talk-bounces at lbo-talk.org]On Behalf Of Patrick Bond Sent: Saturday, August 11, 2007 5:28 PM To: lbo-talk at lbo-talk.org Subject: [lbo-talk] Max's house (was capitalism and collapse)
----- Original Message -----
From: "Max B. Sawicky" <sawicky at verizon.net>
> My impression about the housing problem
> is that people won't be on the street -- they'll be renting garden
> apartments
> and the like. If the mortgage goes belly up they still have the income
> they
> were using to service it available to pay rent.
Ummm, ever hear of negative equity?
Why yes my dear fellow. But if you have to walk away from a house, or worse, declare bankruptcy as well, you still have the means to rent if you could afford a mortgage previously.
Of course it's a financial calamity for the family. But it doesn't put you on the street. If your net worth is wiped out, some additional adverse event could send you into the abyss.
Something should be done about predatory lenders, and some relief afforded to for debtors.
I don't think the world you're alluding to is populated in the U.S. by people who manage to finagle a risky mortgage. It's people renting, one piece of bad luck from destitution, people stuck in benighted neighborhoods and regions, trapped in Wal-Mart jobs, the undocumented, etc. The U.S. working class, African-American included, is way more diverse financially.
mbs
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