Foreclosure Expert Predicts Surging Homelessness
Heavy Hammer Inc., which publishes lists of foreclosed properties nationwide through USHUD.com
Dees Stribling, Contributing Editor
Annapolis, Md.–Heavy Hammer Inc., which publishes lists of foreclosed properties nationwide through USHUD.com, is warning of growing homelessness as high unemployment and foreclosure rates continue to impede economic recovery.
Citing a combination of record rental vacancies and residential foreclosure rates, Annapolis-based Heavy Hammer Inc. CEO Michael Urbanski says the actual numbers of displaced Americans are masked by “assimilated homelessness,” a term describing those who have lost homes or can no longer afford rent, and who have sought refuge with friends and family members.
According to Urbanski, lawmakers’ inaction has contributed to assimilated homelessness as unemployment has remained unchecked and nearly 15 million Americans were without jobs in January. Half of all real estate foreclosures are directly attributable to job loss, he asserts, and 3.5 million people–1.35 million of them children–are likely to experience homelessness this year.
Moreover, actions that the government has taken, posits Urbanski, have only had a limited impact. “Enacting new policies such as HAMP are only useful if the policy itself creates greater profit than previous policies,” he tells MHN. “For example, if the mortgage holder generates an average of $45,000 for selling a troubled asset via short sale, what is the incentive to reduce the principal balance and still be straddled with servicing the troubled assets?”
Urbanski adds that employment is the cornerstone to financial recovery that legislators must address. “With seven million jobs lost since the beginning of the recession, households are collapsing at an alarming rate,” he notes. “Until Washington addresses unemployment and housing with the same seriousness as health care reform, we’ll see more severe suffering for the poor and middle class than anyone is willing to acknowledge.”
According to the most recent report by RealtyTrac (which is not affiliated with Heavy Hammer), foreclosures were reported on more than 308,500 U.S. residential properties in February 2010, a small drop from the month before, but still a 6 percent year-over-year increase.