A while back I was perusing a bunch of online mortgage servicing trade publications when a headline caught my eye: “Foreclosure Effects Found Not So Bad.”
I was hooked; tell me more! The story linked to a Federal Reserve report published in July that seemed to offer evidence for this eye-rolling claim. It was part of some sort of think tank effort initiated by the Fed’s Divisions of Research & Statistics and Monetary Affairs (yes, the name has an “and” as well as an ampersand). To be fair to the Fed, there’s a disclaimer saying that the conclusions drawn were those of the authors, Hui Shan and Raven Molloy, and intended to “stimulate discussion and critical comment.”
It was somewhat of a sleep-inducing exercise to get through the report, laden as it was with all sorts of statistics, references, citations and the like. It seemed that these intrepid statisticians had entered a no-man’s land of sorts, proclaiming that not much has been done to study the lives of those who have involuntarily left their homes. Like Pasteur before them, they had pulled out their microscopes and were now going to examine what happened to a species they branded as “post-foreclosure migrants.” On the face of it, foreclosure couldn’t be a good thing, could it? You didn’t have to be a scientist or statistician to figure that one out. But Shan and Molloy did uncover a happy face of sorts. The foreclosed weren’t quite as bad off as you’d expect.
Using credit data from the Federal Reserve’s credit data base of some 37 million individuals, the authors found that the post-foreclosure migrants are “not likely to live in considerably lower quality homes than they did before,” and furthermore, “these results suggest that, on average, foreclosure does not impose an economic burden large enough to severely reduce housing consumption.”
Immediately, I thought of the historical parallel. Weren’t “post foreclosure migrants” somewhat akin to the “dust bowl refugees” of the Great Depression, whose plight Woody Guthrie captured in folk songs like “Do Re Mi”? (The title was a play on the use of “dough” as slang for money – “Oh, if you ain't got the do re mi, folks, you better go back to beautiful Texas, Oklahoma, Kansas, Georgia, Tennessee.)
So what was the real purpose of the report? Was the Fed trying to convince itself that foreclosure isn’t that bad? Would they roll out the pie charts and PowerPoint presentations and try to convince the rest of the financial community, Congress and the like, that homeowners don’t have to fear deterioration of lifestyle, maybe just a bit of downsizing?
What a difference three months make. Today, Occupy Wall Street is in full bloom. I find the report by Shan and Molloy an ironic counterpoint to what’s going on now in Zuccotti Park. Every day, there’s more evidence that homeowners aren’t simply settling for a move-in with relatives, or a cheap rental in some other part of town.
There’s the beginning of a true fight-back movement; propelled by the energy of the OWS protests, and it’s in evidence everywhere from the Brooklyn State Supreme Court, where nine people were arrested recently for protesting a foreclosure auction, to La Puente, California, where Rose Guidel and her family, surrounded by friends and supporters, refused to be evicted after losing a two-year legal battle. These well-covered events have given inspiration to a growing anti-foreclosure juggernaut. Keep people in their homes, and if that requires the use of the civil-disobedience tactics employed by the civil rights and anti-war movements, so be it.
With all the graphs and statistics that give a seemingly weighty depth to the Fed report, there does seem to be one data set that’s notably absent (and probably yet to be written). I’d like to see some hard numbers compiled on the impact of foreclosure on the foreclosed; something that takes into account the sleepless nights, ensuing physical and mental deterioration; anger and frustration trying desperately to reach “customer service” reps; children torn apart from schools and friends; pets abandoned: in short, how does this experience translate into real people trying to hold on to some semblance of sanity? Now, that’s one statistical study I’d love to see the Fed (or anybody else for that matter) put together.
Joel Sucher, a filmmaker in Hastings-on-Hudson, N.Y., is working on “Foreclosure Diaries,” a documentary about the financial crisis.