American Class Medical Reach Record Level of Foreclosures.

Posted on October 7, 2009
Filed Under foreclosure | 3 Comments

The number of middle class Americans facing foreclosure and bankruptcy has reached record levels according to authenticated research. As per the findings of Harvard University, one out seven families will end up in bankruptcy towards the close of this decade. The numbers facing foreclosures among Americans have exploded in the last five years.

It was all due to the bursting of the housing bubble – largely created by the banking group and the policies undertaken by the Federal Reserve. But the roots of the crisis lie deeper – the conservatives as well as the government want to keep it away from the eyes of the common man.

The research undertaken at Demos, New York show that the middle class have been sucked into this foreclosure crisis because of many factors that have been beyond their control – loss of jobs, staggering medical bills and family separations. For 80% these have been the primary causes.

Many in the banking sector searching for unrealistic profits overreached themselves and also became victims. Absurd credit was advanced to those who did not have the remotest chance of repaying them. Behind these actions was greed, business dealings sans any sort of ethical code and the unholy wish of enslaving the borrower by chaining them to middle or long term debts. These are only few of the many reasons behind the foreclosure crisis.

Delinquencies in credit cards came to a head during the period stretching from 1980 to 2001. These accounts brought in double profits as compared to other routes for taking loans. There were various fees ranging from bank charges to late penalties. Revenue for banks has gone up by 500%. It has touched 7.3 billion in 2002 from 1.7 billion in 1992.

The banks were exempted from state usury laws as in 1997. They could charge any rate with the nod of the Federal Reserve. It could even be 29% for the unlucky borrower who has had the misfortune of missing payments. It has become a habit for banks to make money by preying on the weak borrowers. A top official belonging to the credit card section of Citibank said that these – the weak borrowers – were their “best customers”. It has been narrated in the best seller ‘The Two Income Trap” authored by Harvard professor of law, E. Wilson. The consolidation of loans, the sub-prime loans and other schemes were all rolled out to line the pockets of the banks. As such the foreclosure crisis was inevitable. The banks have brought it upon themselves and the people.

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