Guest Column — The War On The Poor — Jeffrey St. Clair & Alexander Cockburn
The American poor are being driven into the ground. Not only is owning a home out of the question, but also the poor can’t even afford to rent. They lack the money for a damage deposit, and they lack the cash for the large deposits that utility companies require in order to have utilities connected.
The declining ability of the poor to rent is adversely affecting those who provide rental shelter to the poor.
For the dispossessed middle class, foreclosure on a home is often just the beginning of trouble. If, for example, a bank forecloses on a home with a $200,000 mortgage and sells the house for $100,000, under some circumstances the IRS treats the $100,000 difference as income to the foreclosed homeowner and requires the bank to issue a 1099 form to the homeowner showing taxable income of $100,000. http://www.irs.gov/uac/Home-Foreclosure-and-Debt-Cancellation
Alternatively, if the sale does not cover the mortgage, the bank can come after other property that the foreclosed homeowner might possess, such as a second home, car, work equipment, checking account balance. For example, a construction subcontractor who loses his home and moves his family into the office or construction trailer on the lot where he keeps the backhoe loader and work truck can find himself dispossessed of these assets in order to apply the proceeds to the difference between his mortgage and the price at which the bank sells his foreclosed home.
Americans who have not been personally affected by foreclosure have little idea how the system is rigged in favor of the banks that caused the problem and against the victims of financial deregulation.
In the article below, Jeffrey St. Clair and Alexander Cockburn show that the assault on the poor began with the Clinton administration.