Over nine months that ended in June, Americans collectively lost $1 trillion in home equity, estimates Christian Weller, an associate professor at the University of Massachusetts. It was the largest drop since 1974.
Many people nearing retirement had been counting on their home equity as the primary source of income.
Home foreclosures have quadrupled over the last four years from 75,597 in August 2005 to 303,879 in August of this year.
"It is comparable in some neighborhoods to being hit by a major hurricane," [Julia Gordon, policy counsel at the Center for Responsible Lending] said. "Except this was not an act of God. This was an act of man."
"Traditionally, 50 percent who go into foreclosure end up losing their homes," said Chris Varvares, president of Macroeconomic Advisors in St. Louis. "It may be the case that this time it could be a little higher."
That is a lot of economic damage. Much of it is non-repairable - at least in the short-term. The trauma from this disaster will also have long-lasting affects.
Also interesting to find that usually 50% of those that go into foreclosure end up losing their properties. Unless huge changes are made to the foreclosure process things will be devastating. Lengthening out the foreclosure timeline will not necessarily allow the homeowners to keep their properties. The big questions now are how contained we can keep the devastation.