Foreclosure roots

21 Jul

Posted by Richard Dougherty as Foreclosure

Before a remedy can be administered to any disease the first thing is to find out the root causes. Foreclosure roots have to be found out, dug and uprooted. Otherwise the treatment administered will be only skin-deep, cosmetic and temporary. Like temporary painkillers it will keep on coming back and recurring.

Foreclosures are related to the mortgage industry. It has been in existence ever since mankind resorted to borrowing and lending. It is nothing new. When taking a house loan the unit is kept as collateral. If the borrower fails for few consecutive months to repay the monthly installments then the lender has to foreclose on the house, terminate ahead the contract and repossess the house to realize unpaid dues. The question arises is that why is it that today, as never before USA is reeling under the sheer numbers of foreclosures that is affecting all – the economy, the society, the government and the communities?

Nothing happens overnight. The causes of foreclosures go down deep. It is a mistake to think that sociology and economics can be separated. One without the other will lead to lopsided views. Just as the body and mind are intertwined so to is economics and society. A loan culture fed on unchecked consumerism has been actively encouraged and allowed to dominate society. The erroneous thinking has been that if consumers spent their money buying goods then money will flow simultaneously with an increase in demand. This will invigorate the economy. This attitude gave birth to a dangerous debt culture. Previous words of caution were ‘Neither a borrower nor a lender be’ and ‘Cut your coat in your cloth’. There was a quiet dignity about enjoying one’s earnings. The guiding principle was ‘Simple living and High Thinking.’ There was no ugly competition to show-off. There was contentment and peace that made American culture a cult all over the world. It was reflected in the great movie hits of Hollywood in the forties, fifties and sixties.

The credit culture was actively, intentionally let loose amidst the people like the release of deadly virus from selected laboratories. It became a status symbol to flaunt a card to feed compulsive consumerism. Borrowing became a vogue and kind of fashion. Having stoked the fires of greed there was no one to chain the monster that awoke in society. Education standards fell as did moral values. The average person did not think ten days ahead. Habits became slothful with people eating and being more indulgent in every possible way. This led to increases in divorce and illness. Meanwhile jobs began to be lost. Mother Earth could no longer meet the greed of Man. Basic resources like water and oil came to run short of supply. Incidents like 9/11 shook the pillars. Leaders pampered themselves while following a ridiculous foreign policy. Loans were taken from China to bolster a dictator in Pakistan and feed a negative war far from homeland. Foreclosures stepped in to fill the vacuum riding piggyback on sub-prime mortgages. But that was the immediate cause and not the roots of foreclosure.