This whole topic has seemed to be forgotten by the press but the legacy from 2008 roars on. Because the intent/purpose of the systems we’ve created are all about money we have missed the real issues and been blind to obvious solutions.
From a systems thinking perspective all living systems have a purpose. Everything they do is to fulfill that purpose. You might say that purpose becomes their worldview. For the systems we’ve put together in the past 200 years the purpose has been to make money – and we are very good at it! Now, however, our intent is to stay alive and stay o the planet, so it would behoove us to claim LIFE as our purpose!
It has been very distressing to watch the long-term damage that the mortgage crisis has created. That families have lost their homes, children their schools and neighborhoods has put a very emotional face on it, but that is just the tip of the iceberg. As families have been forced out whole neighborhoods have been blighted. That impacts everyone who is left as their property values and safety go down the drain.
Safety is a big issue! As houses are left empty vandals come in and strip anything left of value. So plumbing fixtures, carpet, wiring are all taken. The banks are not in the business of taking care of property and many, when they forced the foreclosure did not anticipate having to care for and protect what they thought of as ‘their’ investment. Once the house has been vandalized the cost of repair goes sky high, meaning that the likelihood that that property will be fixed up and resold very slim.
This has become an asset for Detroit, however. Those houses that haven’t burned, and are still standing, are being claimed by young folks for $5,000 or less, and with sweat equity they are revitalizing large areas in downtown. This is making for a very vital and ‘green’ new city! This is a big shift in a city that has seen 11,217 fires this year and it is only June. That statistic brings up the hidden costs for cities that this crisis generates. With thousands of homes gone the tax base is decimated. Where is a city, like Detroit, going to get the money to pay for 11,217+ fires? The cost is staggering, and fires are only the start. Cities have been filling bankruptcy because of the decline in the tax base.
The mortgage industries resistance to see and understand their own culpability in this situation is criminal. As they insist on continuing to play a game that is way past dead, cities like are burning. By insisting on the money ‘owed’ them they are blinded to the actual costs that their own actions are incurring for themselves. They fail to understand that once people leave a property they will never get ‘their’ money.
Some cities are fighting back. I hope this becomes a movement! In California several cities are moving to condemn property that is ‘under water’ allowing the city to seize them from the investors that own them and then rewrite the mortgage so the previous owners can stay. The hedge fund managers and pension fund managers are complaining. There is talk that banks and other lenders (are banks still lending money?) will not make new loans in those areas. I’m not sure they would make loans in a blighted area anyway. It seems to me that renegotiating those loans would have been the very first option anyone would consider. You want to keep people in their houses and some money is way better than no money, but systems are designed to fulfill their intended purposes and in this case they are doing and committing suicide at the same time.