Homeless Middle Class Rising Amid Foreclosures

Middle class families have always survived on their own, without taking anything from the social services offered to the class below them. But as the foreclosure crisis escalates across the country, more and more middle class families and children have been joining lines at free lunch programs, food pantries and community centers.

And what is surprising is they also have been lining up at homeless shelters. How and why did these middle class families lose their homes?

According to analysts, the subprime mortgage market collapsed because of the overwhelming use of the adjustable rate mortgage option and the loose lending standards applied by banks. Taking a mortgage loan has become just like taking an appliance loan as home loans became available to almost everyone.

ARMs were attractive to borrowers because they required low monthly payments during the introductory period. But once the easy year was over, the monthly payments increased, and a rising number of borrowers were not able to pay. At the same time, fuel prices soared, causing price increases in food and all other items that people need to live. The mortgage banks, also troubled by rising costs and losses, began to foreclose, starting the foreclosure crisis that has not stopped in its onrush.

The soaring number of foreclosure homes that flooded the market caused a free fall in home prices and further hastened foreclosures as more and more homes became worthless compared to what they owe the banks.

The Contra Costa Times and other newspapers have described situations in which homeless shelters and public agencies are being approached by more and more homeless middle class families who have been driven out of their home foreclosures.

For those who have not been forced out of their homes, it is time to prepare and protect themselves from the harsh realities of foreclosure and homelessness by living frugal lives.