Every day, more than 100 Chicago-area homeowners receive a foreclosure notice. It's an epidemic that is accelerating, with the impact spreading through all neighborhoods -- from inner city to middle class to wealthy suburbs.
Some of those foreclosures are on empty condos or subdivision houses, where "flipping" real estate seemed to be the sure road to riches only two years ago. But the vast majority of foreclosures hit young families, middle-age couples, or first-time homebuyers -- all in shock at losing their piece of the American Dream.
Some point the finger at "greedy speculators" who hoped to make a quick profit in the housing boom. Others blame mortgage brokers, who made big bucks offering quirky, adjustable-rate mortgages. Some blame the banks, which were quick to make those loans but can't be reached on the phone now that borrowers are falling behind.
The Savage Truth: It's time to stop blaming and start acting sensibly. If we don't, the foreclosure crisis will forever change America.
I spent last week with three families whose individual stories you can read about on my website, www.terrysavage.com. None was a real estate speculator. All three desperately wanted to keep their homes and were willing to make any sacrifice to do so. And all three were trapped in a system that found no way to assess their circumstances.
One family avoided communication, out of fear. Another took on the system -- and won. A third tried to make sense of an irrational policy that told them to fall behind so they could get ahead!
All were caught in an unfeeling and irrational bureaucracy, which is unable to deal with this tsunami of tragedy. This is what's really wrong:
-- Bureaucratic confusion. Government programs sound inspiring but don't work in the trenches of the lenders' and servicers' loan-modification departments. There simply isn't an understanding of the rules -- even for the older programs, much less the latest foreclosure-prevention plan. And there aren't enough trained people empowered to make sensible decisions in real time.
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