Foreclosures, Fears Soar for Working Families

Last year, while 3.6 million Americans lost their homes to foreclosure, the CEO of Countrywide Financial — one of the architects of the housing crisis — cashed out $121 million in stock options on top of a $10.8 million salary.

A year earlier, before the crash that cost Countrywide itself $704 million, Angelo Mozilo made more than $50 million in base salary alone.

Today, as corporate America digs in its heels on executive pay and the White House refuses to consider regulating Wall Street's financial games, millions more Americans are facing foreclosure.

In hard-hit Dayton, Ohio, IUE-CWA Local 84755 President Jim Tinch said, "People are frightened to death right now."

Rise White, a volunteer from IUE-CWA Local 84798, helps prepare for the day at an AFL-CIO food bank in the local's hall in Dayton, Ohio, where thousands of working families are struggling with layoffs and other economic hardship. Photo by Eric Cromer/IUE-CWA Local 84798

Throughout Dayton, once full of thriving auto parts plants, working families are worrying about their gas and electricity being shut off. An AFL-CIO food bank has been set up in another IUE-CWA hall, Local 84798, where union volunteers are helping serve members who have been laid off. Tinch said even many still working fulltime have seen their paychecks shrink because plants are cutting back on overtime.

California has suffered heavily, and Modesto Local 9333 President Lynn Johnson said, "You'll see 'For Sale' signs and above them you'll see 'bank-owned.' You know it's a foreclosure when you see that. It's not unusual to see five, six, seven signs on a single block."

Even some CWA members there have lost their homes, Johnson said. While their good telecom jobs and strong union contract are in place, some members had spouses laid off when plants moved to Mexico — a Hershey plant announced it will be the latest to go. Renters, including some retirees from her local, have been hurt, too, losing both their homes and security deposits when banks have foreclosed on their landlords.

The local labor council has held a job and housing fair and Johnson's local had a meeting to offer any kind of help possible. "If a spouse was laid off and needed help with a resume, or they needed help with child care, or they needed to know how to go talk to the utility companies about their bills — we just said, 'How can we help you fix things?'" she said.

Modesto is one of the hardest-hit cities in California, where nearly 65,000 homeowners got foreclosure notices in March, three times as many as a year ago. In Nevada, one in every 139 homeowners received one. So did more than 11,000 households in both Georgia and Ohio.

The numbers are staggering nationwide, and analysts predict things will get worse. One bank report issued in April suggests that 12.7 percent of all American mortgage holders could lose their homes by 2012.

Meanwhile, like Countrywide CEO Mozilo, people who helped fuel the mortgage crisis are living as lavishly as ever as executive pay soars at many companies responsible for issuing and reselling the $2.5 trillion in subprime loans since 2000.

Labor leaders including CWA President Larry Cohen have called for an immediate moratorium on foreclosures involving homeowners with subprime and adjustable-rate mortgages.

"The nation's policymakers should take immediate steps to resolve the mortgage crisis and hold those responsible accountable," Cohen said.

An AFL-CIO analysis, "Why the Mortgage Credit Crisis Matters," can be found through a link on the homepage, www.aflcio.org, or directly at www.aflcio.org/corporatewatch/paywatch/mortgagecrisis.cfm.