Foreclosing on the American Dream
by LiUNA, Thu Sep 13, 2007 at 09:21:30 AM EDT
The current "mortgage meltdown" represents a triple whammy or a "perfect storm" for construction workers. Workers who build homes are facing mass layoffs as demand plummets for new homes. In August, the construction industry lost 22,000 jobs. Thousands of construction workers are facing foreclosure on their own homes. And workers' retirement funds may be tainted by misrepresented mortgage securities.
This year, 122 (and counting) mortgage companies have imploded, but it's middle class homeowners who are really feeling the pain. In the first half of 2007, nearly 1 million people are facing foreclosure - a 30 percent increase from 2006. It is estimated that more than 2 million homeowners will be in foreclosure before year-end. Among those are tens of thousands of workers who believed they had achieved the dream of owning their first home. With corporate homebuilders, many of them also mortgage lenders, frantically attempting to slice overbuilt inventory, the workers who build houses in many markets are being cut from payrolls as fast as new home developments sprout.
It is bad enough that workers who build houses are facing unemployment and the loss of their own homes. However, the threat to retirement investments is even more insidious. Trillions of dollars of mortgages were packed into investment securities. Pension fund administrators across the country are now examining investments - which workers depend upon for retirement security - to determine if portfolios have been tainted by overrated mortgage securities. Americans who diligently invested for retirement may face tainted nest eggs and be in jeopardy of losing their homes.
Hundreds of thousands of working Americans - many of whom do the hard, physical labor of building homes and building this country - are experiencing what may be a bigger economic quake than the Enron scandal.
Who is to blame?
The insulated mega-rich and TV talking heads who adhere to the "ownership society" philosophy of "everyone for themselves" will place the blame squarely on working-family homebuyers. For those who have sat at a mortgage closing table and read line by line, page after page of fine print before signing, fair enough.
For the rest of us, and that includes most of us, the time is now for Congress and regulators to investigate who failed us - whether lenders, underwriters or homebuilders - so we can protect our pension investments. We need to protect homeowners and shape saner lending policies that help working people achieve the dream, not the trap, of homeownership.
These issues are central to LiUNA's membership, and so we will be asking Democratic presidential candidates to lay out their plans on how to reinvigorate the working middle class at our leadership conference and live webcast on September 17 and 18. Join us in finding out how they plan on saving homeownership - the most basic of American dreams - at www.liunalive.org.