At this point, the losses incurred from the housing market crash came out to nearly $193 billion in overall wealth. The average household is said to have lost $1,700 last year due to the foreclosures, according to the Alliance for the Just Society.
The group is a coalition of progressive grassroot organizations across the country which are reporting the effects of the crash in 2008-2011. The group stated that $221 billion would be lost if officials do not aid borrowers who owe more than the home is worth.
The general findings indicate that there are many Americans who are currently suffering from the bust, even today. Critics saw the causal factors of the crash was shoddy loans that borrowers were ill-informed about, but regardless of the matter the fact is that many lost value or worse, the home itself, due to the practice.
Construction companies and resellers are reaping the benefits of the fallout, however, which further upsets coalition groups set to defend buyers.
“[The wealth loss] has a major impact not only on the families but on communities as a whole,” LeeAnn Hall, executive director of the Alliance for a Just Society, told The Huffington Post. “They’re putting so much money into trying to save their home, the ripple effect that has on spending hurts the whole community.”
Communities of color are said to have lost more, and likely been targeted more often, for subprime loans, according to the report from AJS. Homes for colored individuals reached $2,200 per home, while white households averaged $1,300 per home. “That disparity in terms of wealth loss is pretty shocking and glaring,” Hall said.
There is little surprise due to the likely targeting of lenders. Still, the large number is an unfortunate finding. The Alliance for Justice has also reported that likely solution to the problem is what is called principal reduction. However, there is pushback from housing market officials. The study by the group stated it would help save over $7,000 per household that is currently described as “under water”.
“If we reduce their payments, it benefits the overall neighborhood, it benefits the bank, it’s a win-win solution,” Ben Henry, the co-author of the report, told HuffPost. “The benefits of doing this are far reaching and profound.”
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