Living After Foreclosure

This BBC video took me by surprise the first time I saw it:

Tent City in LA

I couldn’t imagine trading the security and solidness of real estate for a camper, let alone a tent.  This has got to be a rude awakening for families that have recently lost their homes.  Among the adjustments cited in the clip were cessation of family visits to the new home, and the painful reality of walking by the home that was once owned.

As the economy worsens, as adjustable-rate mortgages reset, as home values fall below the point where people can refinance, and as lending practices tighten, this scene will unfortunately become more common — and not just for people that shouldn’t have been able to buy the houses in the first place.

The market conditions reduce everyone’s margin of safety.  Only the very rich will be immune; middle-class folks that would otherwise thrive and be able to afford their homes are vulnerable to job loss or catastrophic illness.

If you think that this can’t happen to you, well, maybe it won’t, but do what you can to keep your job and to re-position your finances so that a job loss won’t make you delinquent on your mortgage payments.

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