This is the kind of sensationalistic reporting that just makes all “news” agencies look like scaremongers. A recent Chicago Tribune report on homes in foreclosure in Illinois focuses on “higher” rates and says alarming things like, “Illinois foreclosures were up 49.55 percent.” These numbers the Trib bandies about seem shocking. Up 49.55 percent? WOW! But this same report doesn’t quite report the whole truth. The fact is that 9 some percent of Illinois homeowners are paying their mortgages just fine and are not in foreclosure. With a 90 some percent success rate, these “higher” rates of foreclosures seems to be no story at all.
At least the headline is honest — for a change. The brief report is titled “1 in 510 Illinois homes in foreclosure.” One in five hundred is a drop in the bucket, it is sure. But, the story itself seems to try for sensationalistic, scare numbers instead of fully fleshing out the factual news here.
One in 510 homes in Illinois were in some stage of foreclosure in September, a slight improvement from August but almost 24 percent higher than in a year earlier, according to data by RealtyTrac.
During the month, 5,863 homeowners got the first notices that they were in default on their mortgages, and lenders owned almost 3,400 homes that had been foreclosed, the data shows. Compared with the third quarter of 2007, Illinois foreclosures were up 49.55 percent.
We should also remember that some portion of these homes are not owned by single families but people who own homes they rent out as well as people that bought homes they intended to resell later, but don’t live in.
But, still, shouldn’t the real story be that the largest number of people that own mortgages are paying them and are not losing their homes? Shouldn’t it be pointed out that the number of foreclosures is still pretty small and that the whole thing is a tempest in a teapot?
It isn’t like every third household is being tossed out on the streets. It isn’t even one in ten! It’s one in over five hundred! That means in a typical one thousand home subdivision, maybe two homes would be in foreclosure.
Let’s look at Cook County, Illinois, for instance. With a population of just over five million, the County is estimating that there will be 4,500 foreclosures in 2008. Now, that’s all foreclosures, not just actual single family homes as about a third of those homes are occupied by renters (that according to Cook County Sheriff Tom Dart).
The point is, we are not in another Great Depression. During that horrendous era nearly every single American knew of folks who lost everything and was reduced to begging or was one themselves. Unemployment reached into the 25% range. And that number only included white males, because blacks and females weren’t considered “part” of the employable citizenry. If reckoned the way we calculate unemployment now, that number might be more like 60% unemployed. By comparison, today we have some six percent unemployed. These are not calamitous numbers especially in light of the fact that economists consider a five percent unemployment rate as “full employment.”
Yes, we should all feel bad for anyone that is having tough times. And, no, things are not ideal and we must go forward with an eye to reform. But another Depression is isn’t. Statistically this nation is no where near Great Depression stats. It is wild hyperbole to imagine that we are. Yet, we get stories like this Trib example pumping up that false impression, regardless.
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