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Wed Sep 30, 2020, 03:14 AM

A lesson from the last recession becomes California law

Six months after pandemic-induced lockdowns started tanking the U.S. economy and sparked mass unemployment, a feared foreclosure tsunami has not yet come to pass. Thanks in part to financial relief from the CARES Act, as well as government-sponsored forbearance programs that have allowed millions of homeowners to delay mortgage payments, new foreclosures were down 81% in August compared with a year ago, according to ATTOM Data Solutions.

Given the grim state of the economy, however, housing advocates are fearful of what comes next. “The key word is ‘yet.’ We haven’t seen a ton of foreclosures … yet,” said Julia Gordon, a former housing official in the Obama administration who is now president of the National Community Stabilization Trust.

The last time the economy went into deep recession, after the 2008 housing bust, nearly 8 million families lost their homes to foreclosure. Well-heeled speculators, who frequently hide behind shell companies, swooped in to effect a generational transfer of wealth. A handful of real estate magnates close to now-President Donald Trump – such as his inaugural committee chairman Tom Barrack – amassed tens of thousands of these foreclosed homes, frequently offering their former owners leases that amounted to steep increases in rent, while requiring them to maintain the properties themselves.

“It’s been the greatest thing I’ve ever done in my professional life, honestly,“ Barrack said in 2012, boasting of sending “21-year-old kids … with Bluetooths on” to courthouses across the country with “bags of cashier’s checks” to help build an empire of 35,000 homes.

Read more: https://www.revealnews.org/article/a-lesson-from-the-last-recession-becomes-california-law/
(Reveal News--Center for Investigative Reporting)

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