As world food and energy prices continue to increase, more than 8,000 American households are entering the foreclosure process every day.
Bank seizures have doubled in Nevada which emerged as the worst-hit state across the US, with one in every 146 households across the state filing for foreclosure last month.
CNN News yesterday followed our focus on people living in cars with a detailed report (see video):
67-year-old Barbara Harvey made a bare living processing mortgage loans. When she leaves work, she heads for a parking lot behind the historic Santa Barbara mission. That is where she sleeps at night in the back of her car with two golden retrievers.
It’s 10 pm and already there are a half dozen women who settle into this parking lot for the night. There is no running water here, there’s no bathroom facilities, but the women say at least they feel safe.
Barbara lost her full time job and now works part time at $8 an hour. And even though she also gets Social Security, she still cannot afford an apartment.
It’s a tough existence. People who live in their cars, like Barbara, have to constantly move them in search of parking. In California, it’s illegal to sleep in your vehicle. The city of Santa Barbara, together with New Beginnings came up with the safe parking program. They opened up 11 lots where people are allowed to sleep in their cars from 7:00 p.m. to 7:00 a.m. This gated lot where Barbara sleeps is for women only.
Lynn Lague lives in her car with four cats. She’s 54 and use to be in the Army National Guard. Now she is on a waiting list for government housing, but the list is a year long.
�My daughter, especially, is very unhappy. Sometimes she’ll cry. She’ll call and say mom, I just can’t stand it that you are living in the car and she’ll be very upset. I say you know what? This is OK for right now because I’m safe, I’m healthy, the dogs are doing OK and I have a job and things will get better.
These parking lots are right in front of the public. We’re talking about a parking lot right near the beach, another parking lot, where Barbara lives, up at the mission, which is a major tourist attraction. But this is a very carefully monitored program, and so the participants are not allowed to camp outside of their car. They’re not allowed to cook outside of the car.
Basically, they can just sleep there from 7:00 p.m., but by 7:00 a.m., they have to leave, and that presents a quandary, because they basically have to roam around and look for another place to park. And in Barbara’s job, she is lucky because she is employed, she does have a job.
The daily foreclosure rate is the highest on record, with the total number of homeowners falling into arrears with mortgage payments up 65% compared with the same period the year before. More than two million home foreclosures are forecast for 2008. According to real estate data from RealtyTrac, new filings for home foreclosure in April hit 243,353, up 4 per cent on March.
Homeowners file for foreclosure when they have fallen severely behind with their mortgage payments and have received either default notices, or have been given details of a date when their home is to be auctioned, or have seen their house formally repossessed by their mortgage lender.
Averaged over the US as a whole, one household in every 519 had filed foreclosure documents and is on the verge of losing their home.
James Saccacio, chief executive of RealtyTrac, said: �The total number of US properties with foreclosure activity in April was the highest monthly total we�ve seen since we began issuing the report in January 2005.�
The new data adds weight to a prediction by Robert Shiller, co-founder of the S&P/Case-Shiller US house-price index and a Professor of Economics at Yale University, that house-price declines in America stand a good chance of doubling before any recovery begins.
Professor Shiller estimates that real estate values in America have fallen by about 15 per cent already and may decline by as much as 30 per cent � losses of a size not seen since the Great Depression.
At the same time, Wall Street had to contend with official April consumer price data that showed that, stripping out fuel, the cost of living rose by a modest 1.2 per cent over the last quarter. The statistics underline fears that the US is already well into a recession, with prices stagnating as consumer confidence and demand dry up.
Ian Shepherdson, chief economist for High Frequency Economics, said: �The core was held down by a 1.9 per cent drop in lodging costs [a third straight drop as holiday spending slows], a 0.2 per cent fall in car prices [expect more as car sales tank] and a 0.1 per cent dip in recreation. The big story here is core, still 2.3 per cent year-on-year, but the three-month annualised is a mere 1.2 per cent. Recessions do that.�