Foreclosed in East L.A.: An ‘economic funeral march’

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Good morning. This came as a comment from JJ, and it’s one of the best descriptions of the foreclosure cycle -- the ‘economic funeral march’ -- that I’ve seen.

‘Case in point. My neighbors across the street owned their SFR home since 1998 or so, moving their extended family into the first home they’ve ever owned. A rather large, but typical borderline sub-standard stucco box that needs more work than a typical family could sweat, but a home and savings and American Dream made real. Over the years, the growing bombardment of Re-Fi junk mail and Brokerage offers to get a ‘Free Market Analysis’ finally works its magic on the English as a second language family. I watch agents sit them down on their patio and show them pages of their data, filled with rosy comps, demonstrating the ‘inevitable’ values of property in our area. The ‘Transition’ Tag has arrived in NE LA. ‘Gentrification’ has arrived, and with it Middle and Upper Class incomes willing to buy anything with a roof, a toilet, and direct access to HGTV.

‘We talk. I hear them tell me their home is worth over $700,000. I know their home. I know our neighborhood. High-Density adjacent, deeply rooted gangs and poverty perpetuating slum lords. $460,000 is more realistic.

‘So, the cash comes out; they take the money and buy another stucco box out in Fontana to get their kids away from the gangs and the guns, and the economic funeral march begins.

‘They rent the house to an even bigger working poor family, because now the mortgage payments are beyond current rents. The Time Bomb APR blows; the house goes on the market for over $700,000 to never sell. 8 mos. later the bank forecloses, short sells this property and others like it, in bulk, to an investment company, who kicks everyone out without a peep because immigrant minorities are very unlikely to engage their rights under the municipal code.

‘Now the house has a nice big For Sale sign in front of an even more dilapidated, empty, stucco box, listed at: about $450,000. One family ruined, one family displaced, and another blighted property in a neighborhood that needs healthy versions of all three.

‘I’d stake a hefty sum that variations of this scenario is rampant throughout LA County.’

Thanks, JJ, good stuff. Thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Photo credit: AFP/Getty via L.A.T imes