The Big Short is a fantastic film that brilliantly depicts the greed and recklessness on Wall Street that led to the Great Recession. Yet as former Ohio Attorney General Marc Dann reminds us in this week’s Working-Class Perspective, the devastating impact of the home mortgage finance crisis is still being felt by working-class homeowners in America, and the government is doing little to help families at risk of losing their home.
The next time you walk your dog around the block in Las Vegas, Cleveland, Chicago, Daytona Beach, Toledo, or Jacksonville, keep in mind that it’s likely that the owner of every fourth house you pass probably owes more than the house is worth. Realty Tracreports that, as of the third quarter of 2015, 6,917,673 American homeowners owners are under water. In the Cleveland area, where I live and practice law, 27.2% of homes are worth less than the balance of the mortgage, the third highest rate in the U.S. Nationally, among homes in the foreclosure process, over 50% of distressed and delinquent properties are significantly under water. With wages stagnant (the Economic Policy Institute pegs wage rate increase at 1.8% since 2000) and no home equity, many homeowners who are not already in default are just one furnace repair or roof replacement away from foreclosure.
Our Visiting Scholar for the 2015-16 academic year, John Russo, brings the renowned Working-Class Perspectives blog to the Kalmanovitz Initiative. The blog is edited by John Russo and Sherry Linkon, a professor of English at Georgetown University. It features several regular and guest contributors.