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17 February 2007 ANND Communication: HRI Legal Resource and Assistance Center Subject: Communities in Crisis: Pushed Beyond the Economic Limit Dear Colleagues: While the message being presented by those representing federal oversight/regulatory responsibility (including recovery for losses due to negligence) are claiming everything is great, it is time for grass roots groups to focus on protecting the vulnerable from catastrophic losses. Remember the 2000-2002 market crash: Falls in world-wide equity markets during 2000-2002 saw markets decline by US$13 trillion or US$2,000 for every man, woman, and child on the planet according to ABN AMRO’s Global Investment Returns Yearbook, a study of long-term investment returns by Elroy Dimson, Paul Marsh and Mike Staunton from London Business School. -- New research report finds stock market losses total US$13 trillion since 2000. The housing market helped facilitate a rapid economic recovery from this recessionary period via reserve bank/interest rate driven easy access to loans, hyperinflation, appraisal fraud (predatory lending).... the list goes on. Now we are facing a period where More people risk losing homes because of unaffordable mortgages (Baltimore Sun, 16 February 2007): Could lax underwriting standards during the housing boom years - no verification of applicants' incomes or assets, low or no down payments, and big mortgages to people already saddled with heavy consumer debts - finally be coming home to roost? Delinquencies in the $1.3 trillion impaired-credit mortgage market hit 12.6 percent in the latest quarter, up from 11.7 percent. Delinquencies exceeded 13 percent among borrowers with subprime adjustable-rate loans. Angelo Mozilo, CEO of Countrywide Financial, was quoted as saying "there's probably 40 or 50 [subprime loan originators] a day throughout the country going down in one form or another. And I expect that to continue throughout the year." The "ultimate effects are very much like Hurricane Katrina," he said, but "the difference is that this disaster ... is occurring every single day across the country, house by house and neighborhood by neighborhood." The U.S. Senate's Committee on Banking, Housing and Urban Affairs (hearing on predatory lending practices) see's the picture this way (Time to get some closure on foreclosure, 18 February 2007): "Our analysis of subprime mortgages made in recent years shows that 2.2 million families will lose their homes to foreclosure -- foreclosures that were, for the most part, predictable and entirely avoidable through more responsible lending practices," Eakes said. "Our analysis of subprime mortgages made in recent years shows that 2.2 million families will lose their homes to foreclosure -- foreclosures that were, for the most part, predictable and entirely avoidable through more responsible lending practices," Eakes said. "As housing appreciation slows down in many areas of the country, it is clear that problem will only grow worse. All indications are that subprime mortgage loans are headed toward the worst rate of foreclosure in modern mortgage market history." Accurate information relating to consumer protection and available support must reach the household level during this transitional period. This is why it is vital that grassroots communication networks are activated (fax, email, postal via churches, interfaith organizations, youth leadership programs, volunteer programs, corporate networks and media outlets). The America's Action Plan for Community Service facilitated the formation of these networks through the assistance of the national 3100 county Emergency Food and Shelter National Board Program, following the 3000 mile Run Across America (www.runacrossamerica.org) that focused national attention on the unmet needs of frontline service programs, volunteerism, and community service in 1993. Looking forward to your feedback. Stephen M. Apatow President, Director of Research and Development, Humanitarian University Consortium Center Telephone: (203) 668-0282 Email: s.m.apatow@humanitarian.net Internet: www.humanitarian.net Back to Communities in Crisis: Pushed Beyond the Economic Limit Copyright © 1994-2007 Humanitarian Resource Institute.
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