LOOTING THE BATTLEFIELD

Tragedy has two faces: the person who is undergoing the tragedy and the benefactor of the tragedy. Just watch a little TV and you’ll meet them both.

No one who watched Sixty Minutes on Sunday could fail to shed a tear over the hard-working, well-educated, formerly-prosperous Americans who are losing their homes and have no prospects for future employment. In some cases they beg for shelter from friends. In many cases they and their family live in a car or at a homeless shelter. American schools are full of children who have no address. That is the face of tragedy.

The other face is the bright young couple with the whole word ahead of them, the kids you see on HGTV's "House Hunters” They are looking to buy their first home. Agents take them to foreclosures where the listed price is low and where both the owner and the mortgage-holding bank will have to agree on the sale. In many cases the bank will accept a sale price that is actually below the amount of money that is still owed on the mortgage. The good sense of that is that the bank has already collected on the defaulted mortgage and can absorb a little loss in order to put the “lucky;” new homeowners’ names on the new mortgage. It is a disgusting business.

I am not sure that I would like to be the buyer of something that has been taken in default from someone else. Like the treasure on “Antiques Road Show,” an exquisite elaborate vase worth thousands that was traded by an American visitor to German in the years after the war. The price: two cartons of cigarettes. I simply can’t deal with that kind of hardship. But millions do.

Here is the opening paragraph of a popular house-hunting website called “Foreclosure Homes for Sale:“Smart shoppers never pay full price, why should you? Foreclosures are the best way to buy the property you want for up to 50% less than current market prices. And you've just found the premiere spot to locate great deals on "foreclosed homes for sale" of all types, including single family homes, duplexes, fourplexes, town homes, condos, and even apartment buildings. Whatever your real estate needs are, you won't find better deals and more comprehensive listings foreclosure houses anywhere else.”

One and a half million homes are up for foreclosure in America. One and a half million families are losing their homes. Yes, some of them were caught up by the lure of the sub prime mortgage and encouraged to buy far beyond the means by unscrupulous agents who told them the price of houses had nowhere to go but up. As long as that kept going the value of their heavily indebted house would go up. But we know what happened. Perhaps just as many of the foreclosures have nothing to do with the sub-prime seduction. Professional families found themselves unemployed. In the heart of San Jose, California’s Silicon Valley, there are hundreds of home that once belonged to successful information technology people. Many of them have not worked for two years. Many have run out of unemployment insurance. There is no tomorrow for them.

I just wonder how they must feel, if they are watching TV, to see the home where they tied up all their hopes, being sold to a bright-eyed young couple who seem either not to know, or certainly to care, that the people whose dream they have tried to buy, had it collapse.

The only thing it reminds me of is how, in bygone days, soldiers, camp followers, and other scavengers would swarm over a battlefield to search for valuable hidden in the uniforms of the dead. Pretty grisly stuff!

P.S. Banks are in the business of lending money to people who want to buy houses. Imagine if all those people decided to rent and the houses were owned by someone who had bought it for cash. They bank would go begging. They are not authors of the chaos, but they are benefactors.