What’s really behind those foreclosure numbers?

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By Kay Helbling

I’m as concerned as anyone about the state of the economy. But, quite frankly, with the games that have historically been played with words I’m not quite sure where we stand. Not that I don’t know we are in the midst of a recession. Believe me, our savings took a 50% hit like many others. What concerns me is the the way drama is created with numbers that sometimes don’t tell the whole story.

For example, we have the school funding crisis. I’ve lived in Oregon for almost thirty years, and even sat on a school Budget Committee. In all that time, I’ve never seen a school year begin without the educational establishment standing on the doorsteps of the Capitol in “dire need of additional funding”. They always need more or class sizes will explode, teachers will be laid off, and school days will diminish. This year is definitely no exception. The Legislature concedes with consistently and remarkably larger budget increases, many times to the detriment of other social services and public safety budgets. All the while, schools are aware additonal funds come into play in the spring after the state completes its final school funding distributions. But, those numbers aren’t made a part of the earlier discussion.

Then, there’s unemployment—a word that strikes fear into any business owner and employee. Certainly, we have real job losses now and the numbers reflect that, but even during normal economic cycles there are reports of the sky falling. High unemployment figures are often released in the fall. Lacking is the fact that during this period large numbers of student summer job crews are hanging up their work aprons and heading back to the universities and high school classrooms.

The most recent crisis word is foreclosure. Yet, what is really behind those numbers?

Facing job losses and the inability to meet their mortgage payments, our friends contacted their mortgage lender. Surely, with all the taxpayer dollars passed by congress in October to assist with the housing market, there would be a program in place to help them. Well, after almost 6 months and trillions of dollars the government seems to have devised a solution, but not one they could have ever imagined.

They were advised they must miss two of their mortgage payments, which would put them in a foreclosure status. Once having been foreclosed, the banks could renegotiate a much lower interest rate. The end result, they aren’t out of their home but their credit is a wreck…and the government has another notch in its belt of foreclosure numbers.

This makes no sense to me. Why wouldn’t the government simply allow the banks to refinance the loan without the foreclosure? Why must the solution put the credit standing of the homeowner in jeopardy? I don’t know whether this has become a lending crisis or a fiscal management crisis in the way government handles tax revenues.

Then it occurred to me, maybe they are well aware of the words they choose. To government, crisis is the code word for funding and without a crisis there is no urgency or justification for increased budgets.

Kay was an insurance adjuster and executive for 15 years, a small business owner and a teacher for 10. But, her most fulfilling work has been as a mother of her two boys. She is now looking forward to an empty nest with her best friend—her husband.