Ever since Lehman Brothers got bankrupted, serious issues related to subprime loan have caused lower income people to become homeless and squatters. Even though after the economic crisis, most of us continue to build our career, which means that we, or our parents still have enough money to afford it. However, a lot of African Americans and Latinos who live in some area like Antioch, Pittsburg, Brentwood, and Stockton had to move out because of their high rate of mortgage. In the 1960s and 1970s while racial discrimination still existed, non-white people had no right to get loans because of their lower status. During 1990s, when subprime loan became popular, real estate brokers started to offer the loan to those lower income people because they believed that they would make profits. Furthermore, residents did not take a deep consideration of what might happen if the system failed. In order for subprime loan company to make profit as much as they can, they often offered subprime rather than more stable loan.
In an article “LIVING WITH CRISIS”, a worker from the Berkeley Public Library talks about his African-American co-workers who are seriously suffered by economic crisis.
“One of my Black co-workers moved to one of the most popular suburbs, Antioch, where she now drives over 65 kilometers and it takes at least one hour each way. It has been the same with many others of my non-white co-workers. Because of budget cuts at the level of the State of California for funding education, libraries and public parks, programs will be cut back by an across-the-board 10%. This will probably mean that either our salaries will be reduced by 10% or our hours will be cut back by the same percentage. It is the same with schools and other public facilities, affecting all the rank-and-file employees. My co-worker from Antioch is greatly stressed because if her wage is reduced, she will be unable to afford to pay her mortgage and might lose her house. Her house is clearly “underwater” meaning she owes more for than it is presently worth. Some banks will allow her to “sell short” meaning that she can sell the house for less than what she owes the bank and they will forgive the rest. But if she is underwater too deeply, her only option is either getting evicted because she is foreclosed or “walking away” from the house and letting the bank foreclose and repossess it.”
In her case, she still has job and place to live, however some people don’t. Where those people go is they go back to their houses which they technically have no possession. After they sell their houses, it seems like they gain money to find a place to live; however, the money they get by selling their houses is not enough to pay back their mortgages. If the amount of the mortgages is too high, they still have to keep paying those expenses, therefore some of them get back to where they used to have possessions and stay there under fear of being arrested. As number of squatters increased, some cities in California have renewed the regulation to make illegal to live in a place where there is no water supplies. To keep a place to stay, residents often do what ever they can, even if it is against the laws. However, it is obvious that those residents eventually get frustrated and resist those oppressive laws and they actually did so.
“While usually drawing hundreds of angry people, most of these efforts become nothing more then reformist attempts to lobby politicians to force the banks to renegotiate the mortgage loans. Cities like Oakland have intervened and are trying to pass laws encouraging banks to renegotiate ARM loans into more affordable fixed-rate ones and making it more difficult to evict people still living in their homes.”
After cities put some efforts for their residents, they got rights to stay their home for a while and consult their loan, even after a notice of foreclosure.
What has happened in some parts of California is only one aspect of damage caused by economic crisis. Lower class people got suffered much more than any others at this time; however, it could be anybody anytime. Lehman Brothers used to have too much influence through out the world so it was hard to imagine that they fail business that is why whole society had no idea what do with this shocking situation. And we are still processing recovering from economic crisis. In the future, hopefully we are able prevent, and prepare for economic crisis and reduce numbers of people who become homeless or squatters.
Source: Reports on Crisis
