The U.S. housing crisis of the past few years -- partially precipitated by recession, high unemployment, property devaluation and resultant mortgage foreclosures and underwater walk-aways -- is old news. But this week's historic $25 billion settlement, endorsed by 49 States and estimated to help one million at risk borrowers (regardless of what you might think about that), is just one reminder of how sad the crisis has been for millions of citizens.
Quite unexpectedly, I was recently slapped with a far more personal rendering of what this housing crisis has meant to so many. My step-daughter and her fiance recently decided to buy a house. They performed all due diligence including pre-certification, neighborhood research and crime rates before embarking on a near daily evening appointment schedule to look at prospective properties. Given my extensive background in residential construction and rehab, yours truly was fully engaged at this stage and consulted at every viewing. My use of the funereal term "viewing" is intentional. Over half the properties we looked at were what real estate agents call "short sales", a euphemistic term that doesn't begin to describe the thinly veiled tragedies we witnessed.
Short sales, simply described, are mortgaged properties now for sale by the companies that held the mortgage. Seeing these properties that were recently someone's home was heartrending. The neighborhoods and houses we viewed were of U.S. Northeast late 19th / early 20th century origin in various stages of creative rehab and renovation. Individual taste – of course – when it comes to tile and counter selection, but also bunches of money and/or personal labor spent on new walls, refinishing old growth pine flooring, new plumbing, and electrical renovations. All abandoned.
I can't not think about those people; the investment, optimism and enthusiasm represented in what they left behind. And how unlikely it is that they will have what it takes to renew pursuit of their dreams anytime soon. And I don't like my tax dollars going to bail-outs. But if well over 1 million people can be spared the tragedy of the aftermath I've witnessed on a small scale, it's well worth $25K per household to curb this sort of loss for 1 million households and the subsequent inevitable negative consequences to their lives and our shared society.