Paterson, New Jersey: 1 in 10 homes are in foreclosure

Paterson, New Jersey is one of the most diverse cities in the nation. Population of Paterson is approximately 50% Latino, 32% African-American and 27% from other races including middle eastern, pacific islander, etc. as well as white, a startlingly diverse city and a total population of 150,000. Shockingly, Paterson is third in the state behind Jersey City and Newark, New Jersey.

In this city of immigrants and African-Americans one in ten homes lay in foreclosure. Habitat for Humanity has built a thousand homes and the Mayor Jose Torres says a great many of these homes are now in foreclosure. The Mayor says at fault is unscrupulous lending practices and the push of the "American Dream" to buy a home. Not everyone can buy a home, says Mayor Torres. But, the problem is if a lender is telling you - that you can buy a home are most people going to disagree?

So, the great majority of homes in foreclosure are from the sub-prime mess where these homeowners could not afford to buy and the lenders (to make huge amounts of money) preyed on these folks, having them put down 5% or less and gave "balloon" mortgages in which at the end of 5 to 7 years, the loan is required to be paid in full. But, the lender tells the buyer: "don't worry about that - you can refinance." And now we have virtually no refinancing at all and so to pay the loan in full is virtually impossible. What happens? Foreclosure.

A subprime mortgage is a type of loan granted to individuals with poor credit histories (often below 600), who, as a result of their deficient credit ratings, would not be able to qualify for conventional mortgages. Because subprime borrowers present a higher risk for lenders, subprime mortgages charge interest rates above the prime lending rate. But, lenders became more liberal in granting these mortgages because of low interest rates and enormous profits to be made because of the high risk of the loan. It is unfair to blame the crisis on people with poor credit history because all of us are experiencing this devastating economic crisis. The subprime loan is so unfair that a late bill can send your interest rate up.

The issue becomes should we be punishing these homeowners for not being able to afford a loan in an economic crisis not seen since the Great Depression. So, instead of bailing first time home owners, or young people struggling, or young Dominican, Indian, Costa Rican, Black or Arab Americans we bail-out the banks who preyed upon this community and countless other vulnerable communities. Now, I know to a certain extent this had to happen, but should we not be keeping these families in their homes? With an unemployment rate of nearly double the national average (10%) this crisis is only going to get worse. Governor Corzine has sent some money to Paterson, but will it be nearly enough?

Hear Mayor Torres discuss the crisis, and try and put a bit of a spin on it, but the outlook is very bleak.

Obama Plan to Stimulate the Economy is Far Reaching

In this morning's weekly address, President-Elect Obama promised to roll out the biggest investment in public infrastructure since the federal highway system of the 1950's was undertaken. In addition to roads and bridges, the new administration will upgrade public schools, build out broadband, make public buildings energy efficient and modernize medical record-keeping.

Broken Glass

I was reading Monday's online version of the New York Times, and came across a great piece in the Arts section about a new exhibit at The Museum of the City of New York. It is entitled, Broken Glass and is a photography collection of shots of 1980s South Bronx. The photographer, Ray Mortenson, who is from New Jersey, started chronicling urban decay around Passaic, and then decided to move to New York, taking the 5 train up to the Bronx.

His work is eerily empty of life, and he never shot people in his Bronx photography. As the article alludes to, his photos stand as a kind of testament to an abandoned time, place and setting. The bronx, in many of the parts that he went to, is light years different these days, and Mortenson hasn't been back in years. From the article:

Mr. Mortenson said he had not returned to those blocks since he stopped taking photographs in the Bronx in 1984. “I’m ambivalent about it,” he said. “There was something about being there alone, about that time, that I guess I want to keep.”

“It was kind of like being in a horror movie,” he added. “But that was all part of it.”

The title of the exhibit refers to a line from the Grandmaster Flash classic, "The Message."

As Sean Corcoran, curator of prints and photography at The Museum asks in the article, when he looks at the shots of these otherwordly places, he can't help thinking: “How could things get to this point? What political, economic and cultural shifts could lead to such a collapse?”

This is a great question to ask at a time when all over the U.S., as the article notes, peoples' homes, towns and lives look and feel likewise abandoned.