Breaking: Homeless Have No Homes

An odd feature at NYT reports that homeless shelters are seeing a rise in former home owners who were foreclosed on.

Only three years ago, foreclosure was rarely a factor in how people became homeless. But among the homeless people that social service agencies have helped over the last year, an average of 10 percent lost homes to foreclosure, according to “Foreclosure to Homelessness 2009,” a survey produced by the National Coalition for the Homeless and six other advocacy groups.

In the Midwest, foreclosure played a role for 15 percent of newly homeless people, according to the survey, reflecting soaring rates of unemployment — Ohio’s reached 10.8 percent in August — and aggressive lending to people with damaged credit. At a shelter for women and children run by the West Side Catholic Center in Cleveland, where Ms. West now lives, foreclosure accounted for zero arrivals in 2007, the center’s executive director, Gerald Skoch, said. Last year, two cases emerged. This year, the number has already reached four. Similar increases have been reported at shelters in California, Michigan and Florida, where a combination of joblessness and the real estate bust have generated unusually severe rates of foreclosure.

Most people who become homeless because of foreclosure had been low-income renters whose landlords stopped making their mortgage payments, leaving them scrambling for new housing with little notice and scant savings, according to the survey and interviews with shelters. But in recent months, there has been a visible increase in the number of former homeowners showing up in shelters. Like Ms. West, most have landed there after months trying to stave off that fate.

Now, obviously, it’s sad when people lose their homes.  It’s even sadder when people find themselves without shelter and are reduced to living in their cars or on the streets.

But what’s really news here?  We know that, toward the end of the housing bubble, lenders were making no down payment loans to people who had no business buying houses.  People with no jobs, no credit, and no means of paying back said loan.  It wouldn’t be shocking if some number of these people wound up homeless.

Yet, I can’t imagine that this is a statistically important number.  Much more likely:  We have a group whose job is to increase sympathy for the homeless in order to get support for more public funding for the cause.  What better way to achieve that than to paint the homeless as being former home owners who are down on their luck as opposed to, say, drug addicts, alcoholics, and the mentally ill?

Notice the wording of this press-release-disguised-as-news report: “foreclosure played a role.”  What does that mean, exactly?  We’re set up with a long anecdote about a single woman who’s stopped paying her mortgage and found herself on the street.   Then, we’re told that this represents a “growing” trend.  But we’re also told that the principal means of creation of new homeless has long been “low-income renters whose landlords stopped making their mortgage payments.”  Presumably, the end result of this is foreclosure.  Is this report lumping these things together to make it seem like the latter is really the former?  My strong suspicion is that it is.

Oddly, the report was released four months ago.

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James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. odograph says:

    I think there is serious news here, but it is buried, perhaps in the media’s attempt to make it more human (or more video-friendly).

    The news is delinquencies are still rising.

    See the section called “Housing: House Prices increased, meanwhile delinquencies and foreclosure are rising” about half-way down this page at Calculated Risk.

    This graph is particularly worrying. Delinquencies in prime loans started to outpace sub-primes late in 2008, and haven’t slowed down.

    The size and shape of the “foreclosure backlog” is a whole other concern growing out of this. Yes, many unfortunates are becoming homeless, but I think some delinquents are being left in homes until banks can figure out what to do with them.

  2. Furhead says:

    But what’s really news here?

    It’s better than balloon/attic boy “news”.

  3. odograph says:

    Heh, “what’s news” they say, while trying to firmly establish their Bush II era amnesia.

    Here are two more sets of supporting facts:

    Securitized Loans Are 5X More Likely to Be Delinquent

    That is, it was Wall Street making the bad loans.

    FDIC Failed to Limit Commercial Real-Estate Loans, Reports Show

    That is, they didn’t enforce standing rules and the banks that got the pass went broke. The Bush laissez faire didn’t quite as promised.

  4. PD Shaw says:

    we’re also told that the principal means of creation of new homeless has long been “low-income renters whose landlords stopped making their mortgage payments.” Presumably, the end result of this is foreclosure.

    But foreclosure doesn’t necessarily end the lease; usually some additional legal process is required to evict the tenant. (Though states no doubt differ on this)

    Where I live, the tenants most in trouble from foreclosure are those whose names are not on the lease: co-habitators and friends.

    And I’d be surprised in this economy if anybody would foreclose on rental property and evict a paying tenant. UNLESS: the rent is below market, such as in a rent controlled district like New York City.