They are ordinary people trapped by circumstances,” Lichtenstein said. “These are not people who are greedy or eyeing a big house or people who were careless. The home was foreclosed on when she was unable to make the higher monthly mortgage payments. But the woman was unable to refinance and her interest rate was adjusted upward. The woman got an adjustable mortgage after being told that if she made her monthly mortgage payments for a year, the lender would refinance the mortgage at a lower interest rate, Lichtenstein said. The woman wanted a better house and bought a modestly priced house before the recent recession at a time when housing prices were rising. So they took out a mortgage to pay those bills, and then he lost his job and couldn't make mortgage payments, so they lost the home.”Īnother interviewee was a woman who lived in a trailer but had a regular job with reasonable pay, Lichtenstein said. “The family home had no mortgage, but either he or his mother had some medical bills they were not able to pay. He lived with his mother in a family-owned home. One was a middle-aged man without health insurance, she said. Lichtenstein said interviews she has done with several people whose homes are in foreclosure show how they got into financial trouble. Poor and low-income workers typically lack a financial cushion, she said, and when tough times hit, they have few options. They also have more discretionary income, savings and investments, so if they lose their jobs, they have a nest egg to fall back on, she said. Wealthier people typically have more expensive homes and bigger mortgage payments.
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