Article: Most Americans worry about ability to pay mortgage or rent, poll finds

By on October 27, 2010. Posted in .

Noteworthy article for us as a provider of services to families who are homeless or on the brink – the second category encompassing every one of the 2 million households this article mentions will be foreclosed upon this year.

Learn more about the strategies and solutions we are using at www.helpinghandhouse.org.

Most Americans worry about ability to pay mortgage or rent, poll finds
By Ariana Eunjung Cha and Jon Cohen
Washington Post Staff Writers
Wednesday, October 27, 2010; 12:25 PM

A majority of Americans now say they are worried about making their mortgage or rent payments, underscoring the extent of economic anxiety in the country heading into midterm elections.

A new Washington Post poll shows that concerns about housing payments have spiked since 2008 despite some improvements in the overall economy. In all, 53 percent said they are “very concerned” or “somewhat concerned” about having the money to make their monthly payment. Worries are the most intense among those with lower incomes and African Americans.

These concerns can be boiled down to one thing: jobs, said Karen Dynan, who worked as an economist for the Federal Reserve and on President George W. Bush’s council of economic advisers.

“The unemployment rate is still very very high, so if you think of it as being about the odds of someone losing their job and not being able to find another there’s good reason to be concerned about being able to make mortgage payments,” said Dynan, now co-director of the economic studies at the Brookings Institution.

Against this backdrop, just over half of Americans say the Obama administration should impose a period of time during which banks cannot foreclose on delinquent homeowners. The White House has shot down that idea, however, calling it dangerous to the still-fragile housing market.

Some leading economists agree with the administration, but its position on foreclosures could come at a political cost. By opposing a national moratorium, the White House has found itself disagreeing not just with a majority of Americans, but nearly two-thirds of Democrats. Independents also slightly favor a national freeze while Republicans are divided down the middle.

Americans’ views about a moratorium are intertwined with their concerns about their personal finances and the economy.

Those who are concerned about being able to make their payments are more apt than those who aren’t to back the idea of a moratorium.

Overall, 52 percent of all those surveyed back the moratorium, while 34 percent oppose it.

Momentum for a national freeze grew in early October after several major lenders – including Bank of America, J.P. Morgan Chase, Ally Financial – admitted they had found errors in the documents they used to foreclose on borrowers who missed payments.

Leading Democrats and consumer groups said the problems were much more serious, possibly involving fraud, and called for the moratorium so a thorough review could be conducted.

But after the White House spoke out against a national freeze, the idea began to fizzle and some lenders began to restart foreclosure proceedings.

When it comes to assigning blame for the foreclosure debacle, more Americans fault the banks. Forty-five percent of respondents say mortgage lenders are responsible for the mess, while about 26 percent pointed the finger at irrationally exuberant home-buyers.

Twenty percent blame both sides.

“Certainly they are both at fault,” said Cara Habegger, 31, a marketing consultant from Akron, Ohio. “Most people tend to blame the big institutions and certainly that’s valid but if you’re making poor financial decisions and buying houses you can’t afford that’s also not excusable either.”

Young adults are the most apt to blame homeowners, while more seniors point to the banks.

The tidal wave of 2 million homes that are expected to be foreclosed on this year may be having a profound psychological impact on people’s views of their own financial security.

There’s now even more anxiety about making the next housing payment than there was at the depths of the financial crisis. In December 2008, 37 percent were somewhat or very concerned about their monthly housing costs, as compared with 53 percent now.

Seventy percent of renters are concerned, compared with 46 percent of homeowners.

Julie Wharton, 37, who works at a nonprofit agency for at-risk children in Florence, Ky., which is near Cincinnati, said she worries she will no longer be able to pay the mortgage on her three-bedroom ranch house if she loses her job and can’t find another one quickly.

“It’s always right there in the back of my mind. If I was out of work for any length of time, this is something that would happen to me,” Wharton said.

Worry is twice as high among those with household incomes less than $30,000 as it is among those with $75,000 annual incomes.

Fully 75 percent of African Americans are concerned about this, including a majority, 55 percent, who are “very concerned.”

Despite the anxiety, 61 percent of those polled call it a “good time” to buy a house. That’s true for the majorities of Republicans (70 percent), Democrats (61 percent) and independents (59 percent) alike.

The poll was conducted by telephone Oct. 21-24 and included interviews with 1,006 randomly selected adults. The margin of sampling error is plus or minus 3.5 percentage points.

chaa@washpost.com cohenj@washpost.com

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