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What is home? Tens of millions of people face expulsion! The housing crisis in the United States is in a “maligned cycle”

What is home? Tens of millions of people face expulsion! The housing crisis in the United States is in a "maligned cycle"

Tens of millions of people have lost their jobs and can’t pay rent after the coronavirus hit the United States. Federal and local governments have introduced policies of “suspending eviction orders” for different durations. However, this policy is approaching at the end of the year, and people who are unable to pay rent may face forced evictions.

What is home? U.S. media: Tens of millions of people will face a “deportation tide”

“I was expelled and I was homeless.” “For forty million people will be deported on December 1, and their lives are in danger if they lose their homes,” the tweet, which received 22,000 followers and more than 3,500 retweets in just half a day, writes.

This tweet was written by a congressman, and what she called “expulsion” is becoming a hot word on American media and social platforms.

A Bloomberg report in late November cited a survey by the U.S. Census Bureau, which showed that about 5.8 million adults said they could face eviction or foreclosure in the next two months. That’s a third of the 17.8 million households that have not paid rent or mortgages.

The “suspension of evictions” scheduled for December 31 after the Centers for Disease Control and Prevention suspended evictions nationwide to stop the spread of the novel coronavirus. The day is over.

Bloomberg noted that it was too early to suspend the “suspendment of evictions” because millions of people will still lose their unemployment benefits by the end of the year.

In Arkansas, Florida and Nevada, about half of families are not paying rent or mortgages on time, and they are likely to be evicted by January next year.

This means that more than 750,000 families will be evicted. In New York, Houston and Atlanta, the threat of evictions is more urgent.

△The figure shows the number of people expelled per 100,000 people. Red is the highest estimate and blue is the lowest estimate.

Not only renters may face the risk of eviction, but also loan buyers at the risk of future mortgage auctions. During the crisis, most banks offered loan deferrals. However, similar to rent, the deferral does not mean that it can not be repaid, and after the deferral period expires, the lender needs to repay it with principal and interest. For many lenders, it is not unwilling to repay the loan, but the inability to repay it.

Vulnerable groups are very injured. Capitalists sit and wait for “making money”

The crisis has further widened the gap between rich and poor in the United States, which has always been criticized, and reflected in the already significantly differentiated housing problem.

According to the survey of the U.S. Census Bureau, about a quarter of rent-rent families with children now default on rent, and women and ethnic minorities are more in a more difficult situation. Also, according to a survey by the University of California, Africans and Latinos are twice as likely to be unable to pay rent during the pandemic.

△The proportion of people who default on rent is classified. Among them, white people account for less than 10% and African descent account for more than 20%.

On December 2nd local time, the New York Times published a review “Between 30 million Americans and the wave of evictions” pointed out that more than half of renters used 30% of their salaries to pay rent, while more than half of low-income people lowered their incomes between mid-March and mid-September. Despite the relief funds paid by the states, the supply is still in short supply.

“My 7 month pregnant mom and my brother will be deported and we really need help.” This is a help post posted by a netizen on a social platform in the United States.

Some people are struggling on the food and clothing line, while others wait like “vultures” for the opportunity to make money.

“Vulture Capitalist” (investors who use the terms of investment transactions with the company to seize ownership of the company or the most valuable parts of the company.) Waiting for the opportunity to snap up real estate and buy banks at a big discount, private equity is more than ever “pyroaming” during the coronavirus pandemic.

Back in the 2008 financial crisis, U.S. Treasury Secretary Steven Mnuchin made a lot of money by acquiring the bankrupt IndyMac Bank. Indy Mac Bank’s main business is to securitize mortgage loans. In July 2008, hundreds of people demanded withdrawals outside Indy Mac Bank in Southern California due to the outbreak of the mortgage-backed securities crisis.

At the end of the year, Mnuchin bought Indy Mac Bank for about $1.5 billion, including all branches, savings and assets of the bank. In 2013, the bank, renamed “OneWest”, recorded a profit of $300 million, almost the same as that of Indy Mac Bank in 2006. In the first half of 2008, Indy Mac Bank lost $767 million.

This history has been described as Mnuchin’s “past of profiting from victims of predatory loans”.

Back in 2020, capitalists are still “gold-absorbing” above the “victims”. According to a survey by the Census Bureau, as of September this year, 9% of the 48 million homeowners with mortgages in the United States defaulted on their mortgages. When most Americans are unable to afford mortgages, low sales are expected, which will put home inventory in a waiting position.

Because mortgage interest rates are at historically lows, some middle and high-end people who have not been significantly hit by the epidemic have taken home. In September this year, the sales of second-hand houses in the United States reached the highest level in 14 years. In October, the confidence index of American home builders reached a record high.

“The ‘vultures’ are waiting for a big opportunity,” the New York Times said. “The Trump administration’s catastrophic management during the pandemic will certainly provide that opportunity.”

The vicious circle under the “expulsion order”

The U.S. media described the expiration of the “delayed eviction order” as a “storm”, and renters are far more involved in the “storm”.

According to CNN’s November 29 estimate, which quoted the Federal Housing Finance Agency (FHFA), “Fangnie and Freddie” lost billions of dollars to protect renters and borrowers during the pandemic. (” Fannie and Freddie Mac”: Fannie Mae and Freddie Mac, government support agencies established by legislation by the United States Congress, with the aim of providing stable and continuous support to the home mortgage market and improving the availability of home mortgages.)

The FHFA gave a detailed estimate: $4 billion in losses due to loan deferment, loan default, etc., $1 billion in foreclosure deferment losses, and $1 billion in servicer compensation and other extension costs.

Fannie and Freddie have been under government control since the 2008 financial crisis. At that time, the housing market crash caused heavy losses to the two companies and needed taxpayers to rescue them. Rather than providing loans directly, they buy mortgages from original lenders and repackage them to investors, which is an important part of capital flow in the housing market.

△Picture: “Fannie and Freddie” circulates funds between banks, investors and ordinary home buyers through the transmission mechanism to earn interest rate spreads.

In Wednesday’s New York stock market trading, Fannie Mae fell 7.4% to $2.52, while Freddie Mac fell 8.3% to $2.37. Both companies have seen the largest decline since March.

In the interlocking market, any subject in crisis will cause “domino domino”-like risks, even unpredictable disasters.

A series of influences have begun to emerge. According to CNN, from December 1, Fannie and Freddie will charge a new amount called “adverse market fee” on refinancing mortgages, requiring them to pay 0.5% of the total loan as an additional cost in a lump sum. The report said that lenders are expected to pass on the cost, and homeowners may feel the cost.

According to analysis, low-income people will spend more funds to pay rents and mortgages, which will reduce liquidity and consume weakly, thus affecting economic vitality and eventually falling into a “vicious circle”.

“Delayed expulsion order” is difficult to cure.

In order to avoid the low-income people being swept out of the house, the U.S. Congress passed a “probation of eviction” at the end of March. According to statistics, about 12 million people have kept their homes during the four-month “probation of eviction order”. In August, the “proneed expulsion order” was extended again to December. Obviously, this measure is only a “slow-down strategy”.

“Although the eviction moratorium is still in effect,” the New York Times commented, “But Congress still has another option: to formulate a rent recovery plan and restore people’s trust in the government. Otherwise, mass evictions, relocations, foreclosures, mergers and acquisitions, social polarization, etc. will intensify.

Rep. Ilhan Omar, a Democrat from Minnesota, proposed a plan to cancel rent and mortgages and provide compensation to landlords and lenders.

Gary Payente, director of the California Price Center for Social Innovation, made a more moderate proposal to provide the government with a 10-year low-interest loan to tenants so that they can pay Arrease. Ideally, people get subsidies and negotiate repayments with landlords.” Everyone has lost something. The tenant needs to pay some interest, and the landlord can only recover part of the rent. But in the long run, everything is negotiable as long as there is a plan.

At present, no relevant programs have been supported.

At the end of the year, many economic relief measures in the United States are about to expire, and the “rescue cliff” will cause a large number of unemployed people to lose benefits and their lives will be hit hard again. With the cold winter approaching, the number of confirmed cases and deaths of COVID-19 is still rising, low-income people have been forced to move out of their homes, and the economy is in recession, but the new round of relief measures remains a question mark.

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