Lesson16-ThreeMillionHomesRepossessed

Lesson16-ThreeMillionHomesRepossessed - • $7 trillion...

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Lesson 16 Lesson 16 March 30, 2011 March 30, 2011 Nearly three million homes have been repossessed over the last three years.
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Next Week Monday: The US federal debt is approaching $14 trillion dollars (Lesson 17) Read Scurlock pp. 1-15, 59-74 How do credit card companies attract new clients? How do credit card companies make money? Wednesday: : The federal bureaucracy has reached about two million people (Lesson 18) Read Ritzer, pp. 1-34 Know the three explanations for why McDonaldization is spreading so rapidly. Know the goals of McDonaldization.
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Causes of Late Payments and Foreclosures Dishonest home buyers Flipping Overproduction of new homes Assumption that the value of housing will never decline Economic downturn Low interest rates Lax regulation No down payments Securitization of loans “Predatory lending” http://www.pbs.org/now/shows/346/video.html
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Low interest rates are a function of policy…
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The assumption collapses… 28% drop in home values, 2006-2009
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Unformatted text preview: • $7 trillion loss in value from 2006-2009 • Over 11 million families (24% of homeowners) have went “underwater” by 2009 Sources: New York Times, Chicago Sun Times, Reuters, Washington Post, Miami Herald • The Mortgage Meltdown • Increased segregation The Consequences of Late Payments and Foreclosures Source: OMB Before the crisis, minorities were buying more homes Minorities have faced “redlining” for generations… • Withholding information – Ads – Showing homes • “Steering” • Withholding funding Source: Massey and Denton So they have relied more heavily on sub-prime mortgages. Toledo-area data also show that minorities depend more heavily on subprime (“high-cost”) loans to buy their homes. … And it is not because of income. Source: Association of Community Organizations for Reform Now So since the start of the mortgage meltdown, minorities are three times more likely to default....
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This note was uploaded on 02/22/2012 for the course SOC 1010 taught by Professor Angelikagulbis during the Spring '08 term at Toledo.

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Lesson16-ThreeMillionHomesRepossessed - • $7 trillion...

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