Such a sad day, our neighbors of 20 years...

[PeterPan09]

PeterPan09, that's another crisis that will hit more quietly in the coming years. There will be so many people who had dutifully saved for retirement, but had to use it all to get through a period of unemployment. There will be all of these older workers who can't retire and all of these retired workers living very modestly. Then the experts will go on TV and say that we didn't plan ahead and blame us for not saving money for retirement.

My parents live in The Villages-which if you don't know is a HUGE retirement complex in Central Florida. It's massive, I can't even describe how big it is and how many people live there. I call it Disney World for retirees, but it's really bigger than that. Dad and I were saying that it will likely be a ghost town in 20-30 years because of what has happened to working people today. There will be far fewer folks able to retire into that kind of environment after what has happened recently.

 

[Kathi OD]

Which is why those so-called "experts" are now changing their tune to 6 or 8 months expenses. If they were so smart, they'd have recommended that amount to begin with...

Even at 8 months, if you are out of work for 2 years or find your self in a layed-off-found-a-job-at-half-the-pay-oops-layed-off-again merry go round, you're still up a creek without a paddle.

6-8 months is still not enough! We had just over a year's worth of expenses in a liquid account when DH got laid off 21 months ago. Most of that money is gone, not for regular expenses (between his UE and my salary, we can cover our monthly expenses), but for emergencies that we didn't see coming. New sewer line, medical expenses not covered by insurance, car repairs, temporary disability for me; those kind of things.

 

[FINFAN]

I am sorry to hear of your situation, you brother, and your friends....it just is unbearable the state of things. I hope that somehow, some way, you and your friends are able to land on your feet and some happiness finds it's way back to you all.

 

[missypie]

I am sorry to hear of your situation, you brother, and your friends....it just is unbearable the state of things. I hope that somehow, some way, you and your friends are able to land on your feet and some happiness finds it's way back to you all.

I think that most people are amazingly optimistic and resiliant. My only retirement is my 401K that I totally fund (no employer centribution.) It took a huge hit in late 2008 (in fact, we were changing administrators at the time so we were locked out of our accounts and couldn't have mitigaged even if we'd known what to do.)

Those of us who are around my age just silently put away dreams of early retirement and realized that instead of early retirement there might be none at all. We're all just grateful to have jobs. I have a friend who was close to a very nice retirement - she had even bought lland on which to build her retirement home. Only her previously very valuable company stock is worth very little, so she's looking at working maybe 12 more years instead of 2 more years. Again, she's happy to still have her job.

Most people just put one foot in front of another and change their expectations. But you can't blame the folks who harbour anger and bitterness because a whole lot of Americans did exactly the right thing and are still suffering financially.

 

[crjack]

6-8 months is still not enough! We had just over a year's worth of expenses in a liquid account when DH got laid off 21 months ago. Most of that money is gone, not for regular expenses (between his UE and my salary, we can cover our monthly expenses), but for emergencies that we didn't see coming. New sewer line, medical expenses not covered by insurance, car repairs, temporary disability for me; those kind of things.

We have two family members and a close friend all with MBA's and years of experience who have been job hunting for 14 months now. Unfortunately they all worked in the financial services industry.

They are all very responsible with money but as you say anyone going for such a long time is going to use up their savings.

How many professionals ever thought they would need a two year emergency fund and honestly how do you save that much and still do 401K, college funds, etc.???

 

[PeterPan09]

Most people just put one foot in front of another and change their expectations. But you can't blame the folks who harbour anger and bitterness because a whole lot of Americans did exactly the right thing and are still suffering financially.

EXACTLY!! I went to college, I worked hard, I got a good job. I saved. I didn't overextend on a home, I didn't take out a million loans, I didn't overspend on credit cards. The shareholders of the company I worked for got sucked into risky investments which put the profitabilty and capital of our company in crisis and the next thing you know there were pay cuts and layoffs. There are THOUSANDS of Americans just like me, probably more of them then there are people who really did get themselves into trouble with expensive homes they couldn't afford and credit cards.

Who is going to bail us out?? Who is even listening to us??

 

[Kathi OD]

How many professionals ever thought they would need a two year emergency fund and honestly how do you save that much and still do 401K, college funds, etc.???

We NEVER, EVER thought that he would still be unemployed after 21 months. The man has applied for everything remotely related to his skill set and a ton of part-time positions without result, yet. We just keep plodding along, putting one foot in front of the other, changingn our priorities and reevaluating our "needs," just as someone else stated. I can tell you one thing for sure, if it were not for all of the UE extensions, we'd probably be looking at a foreclosure situation too.

 

[Joe in VA]

The housing bubble was in large part a direct creation of the policies of the federal reserve. They lowered interest rates to artificially low levels, which created malinvestment and overspeculation. In addition, they did and continue to create money out of thin air creating an oversupply and devaluing the dollar.

What is happening is a natural correction to many years of artificial market interference. The market needs to correct itself before things can even think of going back to normal.

But what does the government do? They try to reinflate the bubble. $8,000 tax credits to new homebuyers, now extended to $6,500 to almost all homebuyers. The fed has continued to keep interest rates low enough to encourage the same behavior that caused the problem. The politicians need a new bubble to create an environment that will give them short-term political security, the fiscal future of our nation be damned.

Until we change our incredibly short-sided monetary policy we will continue to see crashes and booms and no stability.

 

[missypie]

Has anyone seen any sort of statistics on how many of the residential foreclosures are due to long term unemployment vs. the much publicized "irresponsible and bought too much house"? It's convenient to be able to blame the victim, but I bet the former category is much larger than the latter.

 

[2girlsmom]

We have been very lucky, as in our situation it was a matter of identity theft that nearly cost us our house. Thankfully our mortgage provider has been very willing to work with us to refinance, but I certainly feel nothing but sympathy for anyone going through this. It is a very stressful and difficult process, regardless of where the fault lies.

 

[PeterPan09]

Has anyone seen any sort of statistics on how many of the residential foreclosures are due to long term unemployment vs. the much publicized "irresponsible and bought too much house"? It's convenient to be able to blame the victim, but I bet the former category is much larger than the latter.

It's not just convenient-it allows people to continue to think that it could never happen to them because they're not irresponsible and they never bought too much house. It's a form of denial.

If most people really took a hard look at their mortgages and other expenses, and looked honestly at the chances that they could lose their jobs through no fault of their own there would be a much larger group of outraged people.

 

[iwrbnd]

When this recession first hit I thought we would be okay. We aren't big spenders and we have stable jobs. I'm a teacher and my husband is a physician.

Well, our school district is laying people off & I've had my hours cut & may not even have a job next year. My husband's office is not doing well because people aren't going to the doctor and when they do they aren't paying the bills. I think everyone is feeling this recession! At least we're not alone!

 

[NotUrsula]

Has anyone seen any sort of statistics on how many of the residential foreclosures are due to long term unemployment vs. the much publicized "irresponsible and bought too much house"? It's convenient to be able to blame the victim, but I bet the former category is much larger than the latter.

I don't know the numbers, but I was listening to Diane Rehm's show a few days ago, and the experts that she had on said that there have been three waves of foreclosure activity. The first wave (late 2008) hit the speculators, the second wave (the first half of 2009) were mostly attributable to bad lending policies, but that the current wave (from last fall until now) was almost all due to unemployment or medical crises.

The bigger the risk, the faster the fall came. This has been going on for nearly two years now, and the ones who are still falling are the ones who were largely victims of circumstance. They didn't take a large risk, but they are getting hurt anyway.

The list of the top 5 states keeps shifting every month, but for the most part the ones hardest hit were those with large tourism and retiree markets. Some of that is due to speculation, but by no means all. Those economies depend on discretionary income, and when folks don't have it, the people who work in the hospitality and related service industries lose their jobs.

Oh, and this ...

How many professionals ever thought they would need a two year emergency fund and honestly how do you save that much and still do 401K, college funds, etc.???

I'm a financial freak, because I do the emergency fund before I do the others. I've seen too many people brought down by medical debt, job loss, and death of a spouse to feel comfortable putting retirement and college money ahead of the here and now. My short-term fund doesn't earn much interest, but nothing except me can put a dent in it. The retirement fund and the college fund got hit when the market crashed, but not the emergency fund; it hasn't lost a penny, and it won't unless I need to draw upon it.

 

[Disneyland1084]

Are leaving their home, due to foreclosure.

We have lived next door and shared a driveway for 20 years. The house was in their family for 55 years and today they are leaving. It is very hard because soon we will be leaving due to the same issue. Probably within a few months or less. It's been very stressful and very sad. I don't even know what to say to them.

I'll never be able to come down this street again once we leave. It will be too painful. The worst part is, my brother is away training for his next deployment to Afganstan and who knows if he will be able to come home to his house. I don't think so and that eats at me the most.


Don't mean to be a downer but I just wanted to let it out.

 

[ReneeA]

We've been very fortunate not to lose our house. My DH was laid off over 2 years ago for 9 months at that time, and was eventually called back for part time work. What that meant was 1/3 his hours, 1/3 his income, and no more health insurance.

I was in nursing school, and it certainly wasn't smart to give up my spot there...so I got a part time job working at that time. Again, small income, no bennies.

We were able to keep our house bacause we stayed in our tiny starter home rather than upgrade when it was financially possible. Unfortunately, we were not able to pay both the mortgage and the cost of health insurance, so we've been without for over a year. People on these boards have gone on and on about how irresponsible that is, but for most people that are unemployed, it's not an option to pay OOP for health insurance. It was pay my mortgage and keep a roof over my family's head or pay for insurance.

I would have NEVER thought it could happen to us. DH has had a very stable, in demand job for years. All those who have never been in those shoes can talk all they want and brag about how wonderfully they'd handle it...but they really have NO idea...especially when it goes on and on for years without improvement.

 

[Lisa loves Pooh]

Has anyone seen any sort of statistics on how many of the residential foreclosures are due to long term unemployment vs. the much publicized "irresponsible and bought too much house"? It's convenient to be able to blame the victim, but I bet the former category is much larger than the latter.

I have not looked specifically at the numbers--

but what I have looked at....

The crisis began occuring in MY area--when those who were irresponsible began going bust. Those who knowingly signed something they did nto understood or knowingly took a huge gamble and lost.

I recall seeing my first "facing foreclosure?" advertisement in 2006 or so in my area.

We have the greedy flippers to thank for that!

Now, we are transitioning into situations where people are having to short sale or foreclose through no fault of their own. IOW--the effects of the economy have trickled down.

I find it too easy to blame the entire situation on "It's not my fault-itis". Far too easy.

Many people knowingly in situations--but not doing EVERYTHING in their power to stop it.

Everyone wants to jump on the...but but but--it's not my fault! bandwagon.

My husband and I are there--sort of. But he found a job within a month. We cannot sell our house. I hold a little anger towards teh flippers who drove the market crazy. But in the end, it truly is not their fault. My home would have been fine--but teh 2nd mortgage is mostly consolidations.

We were irresponsible EVEN THOUGH--his job loss was not his fault.

I would be dishonest if I even tried to blame anyone but ourselves for our predicament. Everything around us makes it harder to resolve our predicament--and statitistically, if we lost our home--it would appear that the economy caused it.

But when you look deep down into it--it wasn't the economy. It was us.

And in many cases, outside of the very troubled plant shut downs and extreme situations--this is not a nationwide issue. All 50 states can't claim to be Detroit.

California, Nevada/Las Vegas, and Florida--an "investment", "overdevelopment", "Flippers" nightmare.

I have friends who are going bankrupt. I can feel a little bad for them, but it doesn't go much more than that. They know why they are going bankrupt--they took a gamble (flippers!) and lost. Sure the economy didn't help the situation. But in the end, they got carried away BIG TIME!

I have a short sale in my neighborhood right now. The characteristic short sale situation around here--2004 hurricanes, house had lots of damage. Cha-ching to insurance and high homevalues, convert the home into something uber nice. Now they cannot refinance when they need to. Now they must get rid of their home. That is exremely typical. That is us--except for the cha-ching part. We had no damage. But we had just buitl a pool and screen room and redid our kitchen that summer and later on we consolidated debts. We are no different--except their house is nicer.

I do believe now the people losing their homes--are the ones that are seeing crisis due to the economy. But at the same time, I have to wonder how much of that was driven by their own actions?

 

[wdwfan16]

Has anyone seen any sort of statistics on how many of the residential foreclosures are due to long term unemployment vs. the much publicized "irresponsible and bought too much house"? It's convenient to be able to blame the victim, but I bet the former category is much larger than the latter.

It can be both. They could have bought too much house and then had nothing to save. Lose their job and the house deflats. Bam...foreclosure.

 

[CapeMayMommy]

We have two family members and a close friend all with MBA's and years of experience who have been job hunting for 14 months now. Unfortunately they all worked in the financial services industry.

They are all very responsible with money but as you say anyone going for such a long time is going to use up their savings.

How many professionals ever thought they would need a two year emergency fund and honestly how do you save that much and still do 401K, college funds, etc.???

ditto, my brother who is a corporate accountant. 18 months of daily looking---sending out dozens of resumes. He easily passed the CPA exam.

He says "I refuse to be morose". He is walking dogs to make a little extra money.

 

[Disneycrazymom]

The housing bubble was in large part a direct creation of the policies of the federal reserve. They lowered interest rates to artificially low levels, which created malinvestment and overspeculation. In addition, they did and continue to create money out of thin air creating an oversupply and devaluing the dollar.

What is happening is a natural correction to many years of artificial market interference. The market needs to correct itself before things can even think of going back to normal.

But what does the government do? They try to re inflate the bubble. $8,000 tax credits to new homebuyers, now extended to $6,500 to almost all homebuyers. The fed has continued to keep interest rates low enough to encourage the same behavior that caused the problem. The politicians need a new bubble to create an environment that will give them short-term political security, the fiscal future of our nation be damned.

Until we change our incredibly short-sided monetary policy we will continue to see crashes and booms and no stability.

I also think much of this has to do with interest rates being artificially low. I believe we are in for a difficult time ahead. I fear it will be a time worse than we are seeing now. Interest rates cannot remain this low forever. As the debt ratio goes up and interest rates go up more will suffer. I hope I am wrong and the efforts under way currently will stabilize our economy. But creating another "bubble" to fix it now will imho just bring more pain later.