EXBURBAN DREAMS DEFERRED. Over the past few years, stories of far-flung suburbs decimated by foreclosures have become newspaper staples. With resort-like names such as �Pocono Mountains� (in Pennsylvania, a 5-hour commute from New York City) and �Villages of Avalon� (in Riverside County, Calif., over an hour from downtown L.A.), it turns out that for many young families, these communities really are little more than a fantasy. The American romance with house-owning has long eclipsed concerns about the negative impact exurban lifestyles have on our larger society: more gas guzzling, loss of green space, and ethnic homogeneity, just to name a few. But over the past decade -- in part due to federal policies that boast of increasing minority home-ownership rates, but in practice enrich developers and banks -- mortgage foreclosures and homeowner vacancies have reached record highs. The story is always the same: clever marketing campaigns prey on families in blighted neighborhoods, promising them the American dream and then some. Once the potential buyers are reeled in, developers and lenders offer short-term perks like reduced or even free rent and make outsize promises about the property�s potential value. And when these working class families agree to buy, they are often overcharged, even as they rely on subprime loans, since low credit scores mean they can�t qualify for conventional mortgages. This L.A. Times article about foreclosures in Perris, Calif. is more of a human interest story than a hard examination of the economic forces at work here, but the story reveals what�s so pernicious about this trend. When financially insecure families purchase a home through an adjustable-rate mortgage, they become more likely to foreclose, not less, as the value of their property increases. When the housing market booms, interest rates go up, shifting the value of the home from the borrower to the lender as monthly mortgage payments increase. Since incomes aren�t growing as quickly as other sectors of the economy, people aren�t able to keep up with their bills. The result is a crippling cycle of debt that prevents families from climbing back onto the real estate ladder. In the past month, Senate Democrats have held hearings on the deceptive marketing and predatory policies of both mortgage lenders and credit card companies. But protections need to have teeth, meaning regulation of the lending industry, a major campaign financer. Keep your eye on which electeds have the courage to act. Hillary Clinton has proposed �foreclosure timeouts� and a shift of Federal Housing Administration loans from high-income to low-income areas. But the exurban nightmare is about more than just home ownership -- it�s a microcosm of the insecurity and inequality so many Americans are feeling across their lives. --Dana Goldstein
