We all realize that we are currently in a recession and times are tough. Almost everyone I know has been affected by this recession in some way, including my family. Due to this assignment, I have found myself asking this question: how has the recession affected my family and the community? Everyone that I spoke with had strong and emotional answers to this question. This past year has been very hard for my family.
Both my husband and I where laid off from our jobs leaving us struggling to find a way to provide food, shelter and all other necessities in life for ourselves and our two children. With not knowing how we would be able to pay for our bills, loosing our home and the possibility that our car wouldn’t be there when we woke up in the morning, left us with a sickness in our stomachs and a lot of sleepless nights. How is the recession and mortgage fraud affecting the local businesses too?
If the recession were a disease, it would be an epidemic. The City of Fairfield in Ohio has had many properties affected by mortgage fraud. These properties were sold at artificially inflated price which resulted with properties in the surrounding neighborhoods to also become artificially inflated. When that occurs, property taxes also artificially increase. As unqualified homeowners began to default on their inflated mortgages, properties have been going into foreclosure and neighborhoods begin to deteriorate (1).
With the homes deteriorating, surrounding properties and neighborhoods witness their home values depreciating. As this happens, legitimate homeowners find it difficult to sell their homes. Additionally, the decline in home values has had a direct impact in the City of Fairfield with the ability to provide resources for schools, public safety, and other necessary public services that are funded in large part from property tax revenue.
With the loss of income for the city has resulted in cutting funds and jobs for many Americans. What is one example of how the economic crisis of the United States has affected the global economy and businesses and people in other countries? Because of the “United States housing bubble” , securities backed with mortgages, including subprime mortgages, with companies such as Freddie Mac and Fannie Mae, were widely processed by financial firms, who lost most of their value (2). Global investors also drastically reduced urchases of mortgage-backed debt and other securities as part of a decline in the capacity and willingness of the private financial system to support lending. Concerns about the soundness of U. S. credit and financial markets led to tightening credit around the world and slowing economic growth in the U. S. and Europe (3). What examples can I identify that we are emerging from the recession? Looking forward, I can see that the local, state, and federal governments are creating tasks forces and highly enforcing laws which help stop mortgage fraud.
Also according to the City of Fairfield’s 2011 Operating Budget, they quoted “demonstrates the overall financial strength of the City of Fairfield’s financial position, especially in the General Fund”. “This strength is attributable to the vibrant and diverse economic base that continues to be Fairfield’s hallmark along with the City’s consistent stewardship of controlling expenditures, even during favorable economic times” (4).