A new report from the Brookings Institution contains alarming data about children and foreclosureForeclosure is the legal action taken to extinguish a home owner's right and interestInterest is money charged for the use of borrowed funds. Usually expressed as an interest rate, it is the percentage of the total loan charged annually for the use of the funds. in a property, so that the property can be sold in a foreclosure sale to satisfy a debt.. The foreclosure crisis will impact eight million children by the time it’s all over. And as usual, providing personal finance advice, real estateReal Estate is land and anything permanently attached to it, such as buildings and improvements. advice and consumer advice on the Ilyce Glink Show April 22, 2012 on WSB Radio.
Last week we discussed the $25 billion mortgageA Mortgage is a document granting a lien on a home in exchange for financing granted by a lender. The mortgage is the means by which the lender secures the loan and has the ability to foreclose on the home. settlement, and I labeled it a watershed moment for the foreclosure crisis. Though many stalled foreclosures will finally be processed and more homeowners displaced, we WILL finally start to climb back out. The era of untenable mortgage loans and bad practices from irresponsible mortgage lenders may finally begin to recede.
Though painful, this is all to the good. However, the issue of children and foreclosure, how this long-running crisis has impacted our young people, is rapidly coming to a head. The Brookings Institution just released a report that concludes that one in 10 of our nation’s children have been negatively affected by the foreclosure crisis. This is a national average. In hot spots like Georgia and Nevada, the rate shoots up to roughly one in five.
2.3 million children have already lost their homes. Eight million kids in total may endure this devastation by the time the dust settles. It occurred to me as I read these sad statistics that we are ruining two different generations of America’s children. This is not just about money, the housing market and mortgage loans. This is about precious lives.
There are the very young ones, toddlers and babies, who feel the tension of their parents yet do not fully understand, and don’t have the vocabulary to ask questions. Then there are the teens who feel their world is coming apart and they can’t even help. What is the psychological impact of this tumult and what does it mean for the future of the housing market and the next generation of homeowners? Callers and I discuss.
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