News / Economy

Analysts: Foreclosure Mess Hurts US, Global Economy

Foreclosure Mess Hurts US, Global Economyi
|| 0:00:00
X
July 06, 2012 11:18 PM
The U.S. housing sector usually leads the rest of the economy out of recession. But that is happening much more slowly than usual in the wake of the latest downturn. That is because the housing industry is burdened by a huge number of bad loans that have caused a financial, bureaucratic, and economic mess. As VOA's Jim Randle reports, problems in the U.S. housing sector are slowing the economic recovery in the world's largest economy, and elsewhere.

Foreclosure Mess Hurts US, Global Economy

WASHINGTON — The U.S. housing sector usually leads the rest of the economy out of recession.  But that is happening much more slowly than usual in the wake of the latest downturn.  That is because the housing industry is burdened by a huge number of bad loans that have caused a financial, bureaucratic, and economic mess. Problems in the U.S. housing sector are slowing the economic recovery in the world's largest economy, and elsewhere.

Deborah Harris faces possible eviction from the home she has owned for the past 17 years, after failing to make some of her mortgage payments.

Harris was a paramedic with Washington's fire department.

"Here you are about to lose your home.  It's nowhere else to go.  I don't have any husband, I don't have any children.  I've worked 23 years in the Fire Department, saving lives, keeping people alive, and here I am retired, and I don’t have a place to stay. Come on.  I mean, that's ridiculous," Harris said.

Harris won awards and promotions for her service on an ambulance, but stopped working after she was hurt carrying a large patient.  

It took many months of doctor's exams and filing paperwork to convince officials she was entitled to a pension. During that period without pay, she fell behind on her mortgage.  

The financial crisis that started in 2007 brought rising unemployment, falling home values and surging foreclossures.  

Foreclosure specialty firm RealtyTrac says foreclosures soared to more than one million a year at the peak of the crisis, from about 200,000 in an average year.

A slightly better economy has cut the foreclosure rate, but it will probably still hit about 700,000 this year.  

The chief economist from the National Association of Realtors, Lawrence Yun, says the flood of foreclosures hurts the U.S. economy, which cuts demand for products from other nations and slows global growth.    

"Foreclosure is the predominant reason for why the housing market is taking a long time to recover," Yun said. "Historically, the housing market always leads the economy, so when housing market goes down, the economy goes into a recession.   When (the) housing market recovers, economy comes out of recession."

Harris says falling into foreclosure has been a nightmare. "If it had not been for God to help me, I know I could have just gotten a stroke and died, because it was just so devastating, knowing, I didn't know when they were going to come and try to get me out of here," she said.

Harris is just one of 4.3 million people who have gone all the way through the foreclosure process since the beginning of the financial crisis.  But with help from a community group and a lawyer, she is fighting the foreclosure in court.

You May Like

Koreas Mark 61st Anniversary of War Armistice

Muted observances on both sides of heavily-armed Demilitarized Zone that separates two decades-long enemies More

Judge Declares Washington DC Ban on Public Handguns Unconstitutional

Ruling overturns capital city's prohibition on carrying guns in pubic More

Pricey Hepatitis C Drug Draws Criticism

Activists are using the International AIDS Conference to criticize drug companies for charging high prices for life-saving therapies More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Students in Business for Themselvesi
X
Mike O'Sullivan
July 26, 2014 11:04 AM
They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.
Video

Video Not Even Monks Spared From Thailand’s Junta-Backed Morality Push

With Thailand’s military government firmly in control after May’s bloodless coup, authorities are carrying out plans they say are aimed at restoring discipline, morality and patriotism to all Thais. The measures include a crackdown on illegal gambling, education reforms to promote students’ moral development, and a new 24-hour phone hotline for citizens to report misbehaving monks. Steve Sandford reports from Bangkok.
Video

Video Virtual Program Teaches Farming Skills

In a fast-changing world beset by unpredictable climate conditions, farmers cannot afford to ignore new technology. Researchers in Australia are developing an online virtual world program to share information about climate change and more sustainable farming techniques for sugar cane growers. As VOA's Zlatica Hoke reports, the idea is to create a wider support network for farmers.
Video

Video Airline Expert: Missile will Show Signature on Debris

The debris field from Malaysia Airlines Flight 17 is spread over a 21-kilometer radius in eastern Ukraine. It is expected to take investigators months to sort through the airplane pieces to learn about the missile that brought down the jetliner and who fired it. VOAs Carolyn Presutti explains how this work will be done.
Video

Video Treatment for Childhood Epilepsy Heats up Medical Marijuana Debate

In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Airbus Adds Metal 3D Printed Parts to New Jets

By the end of this year, European aircraft manufacturing consortium Airbus plans to deliver the first of its new, extra-wide-body passenger jets, the A350-XWB. Among other technological innovations, the new plane will also incorporate metal parts made in a 3-D printer. VOA's George Putic has more.
Video

Video AIDS Conference Welcomes Exciting Developments in HIV Treatment, Prevention

Significant strides have been made in recent years toward the treatment and prevention of HIV, the virus that causes AIDS. This year, at the International AIDS Conference, the AIDS community welcomed progress on a new pill that may prevent transmission of the deadly virus. VOA’s Anita Powell reports from Melbourne, Australia.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.