That all portends "payment shock" for those with adjustable-rate mortgages whose loans are due soon to adjust, said Javier Silva, senior research and policy associate with the public policy research group Demos in New York City. "Lots of ARM customers are experiencing payment shock already, and we're only see the first wave of adjustments upward," Silva said. "People didn't understand how much their interest rate could rise, or were unprepared for it. I'm not surprised that we're seeing rising foreclosures.
For the first time since its decision in Buckley v. Valeo nearly 30 years ago, the Supreme Court has agreed to review the constitutionality of campaign spending limits. The case, Randall v. Sorrell, No. 04-1528, raises issues that go to the heart of our democracy. Vermont’s comprehensive reform law was adopted in 1997 out of concern over the escalating arms race in campaign fundraising and spending that has undermined public confidence in government and turned elected officials into full-time fundraisers.
According to Javier Silva, a senior research and policy associate with Demos, a New York think tank and public policy organization, homeowners' equity fell from an average of 68.3 percent to 55 percent between 1973 and 2004. Americans now own a smaller stake in their homes than they used to. In the 1950s, they owned nearly 80 percent.
If real estate appreciation slows or declines, homeowners without equity that is firmly established may find themselves owing more than their houses are worth.
According to a Demos study, Americans from 2001 to 2003 cashed out $333 billion in equity from their homes. Many did so to pay off credit card debt and finance ongoing living expenses -- both good and noble financial causes.
The study concluded that Americans own less of their homes today than they did in the 1970s and early 1980s.
Professor Robert Frank of Cornell University, the author of Luxury Fever, compares conspicuous consumption in an economy like ours to the military arms race, and we already know that's destined to end in mutually assured destruction.
The key to countering this headlong rush towards ever-more expensive disappointment is to switch from conspicuous to inconspicuous consumption.
This new Demos report, published in collaboration with Business Ethics Magazine, explores growing efforts by state and local governments to ensure corporate accountability. It looks at the changing role of state treasurers, labor pension funds, and others working to demand more responsible business practices at a time when national reform proposals have been stalled in Congress.
"Appraisal fraud is part of a bigger, more ominous picture," says David Callahan, Home Insecurity author and Director of Research at Demos. "As home prices have continued to increase above inflation, even nearing 20 percent per year in some cities, American homeowners are vulnerable as never before to financial ruin if home prices fall to their natural market value."
"To make matters worse, an increasing number of Americans have reduced the equity in their home to meet rising living expenses, like education and health care, or to pay off credit card debts.
"The Plastic Safety Net" study found that middle- and low-income households were racking up credit card balances just to cover everyday expenses. One-third of the 1,000 survey respondents said that basic living expenses contributed to their current debt level.
Last week, New York-based consumer action group Demos and the Center for Responsible Lending released findings from a new report, "The Plastic Safety Net: The Reality of Household Debt in America." The survey results found that 7 out of 10 low- and middle-income families are using their credit cards as a safety net, relying on credit to pay for car repairs, basic living expenses, medical expenses or house repairs.
Households that reported a recent job loss or unemployment, and those without health insurance, were almost twice as likely to use credit cards fo
Public Briefing is an occasional white paper series by the Public Works program of Demos. These papers include summaries of research and reports as well as essays and articles related to the work of the program.
Key findings from the second round of cognitive interviews about public perceptions of government.
One-third of low- and middle-income consumers are using their credit cards to pay basic living expenses - including their monthly mortgage, according to a new study.
CRL and Demos also found that even though consumers are using home-equity loans to pay down their credit cards, many households are still carrying huge card balances, increasing their overall debt levels.
The average credit card debt of low- and middle-income indebted households was $8,650, according to the study from Demos and the Center for Responsible Lending.
The more stringent law comes at a tough time for American consumers. A survey released last week showed that total credit card debt now stands at about $800 billion. That is up 31 percent since 2000
A new study about America's credit card debt from policy research and advocacy groups Demos, the Center for Responsible Lending, and the AARP shows that the most debt-troubled consumers are those who don't own their homes, even though their credit card balances are lower than those who are their own landlords ($6,880 vs. $10,296).
The fact that renters have a hard time dealing with debt than homeowners could be attributed to their having less disposable income -- a fact borne out in the survey results.
"The Plastic Safety Net," released Oct. 12 by policy research and advocacy groups Demos, the Center for Responsible Lending, and the AARP, reveals what's on our credit cards, why it's there, and what we're doing to manage our financial obligations.
The study found that most debt-strapped households use credit to cover unavoidable expenditures, not discretionary purchases. We're increasingly relying on plastic loans to pay our rents, mortgages, utilities, groceries, car repairs, and insurance premiums.
DEMOS, a New York-based public policy group that studies economic opportunity issues, and the Center for Responsible Lending, a Washington policy group focused on predatory lending, said low- and middle-income families fall into credit card debt to cope with income declines or unexpected costs.
According to the survey, 48 percent of respondents said they used credit cards to pay for car repairs while 38 percent reported paying for home repairs with plastic.
American families are struggling in an increasingly volatile economy defined by job instability, continued layoffs in the guise of "downsizing", and declining employee benefits--factors augmented by new trends like outsourcing and unfettered trade. The result is a fragile alliance between workers and employers-- and families and the economy. At the same time that American households have become more vulnerable, our economic safety net has steadily eroded.
Public Briefing is an occasional white paper series by the Public Works program of Demos. These papers include summaries of research and reports as well as essays and articles related to the work of the program.
An analysis of the images of government in the public mind.
Eighteen- to 24-year-olds have an average $2,985 in credit card debt, according to last year's Demos USA study, "Generation Broke." The average plastic debt for 25- to 34-year-olds is $4,088.
Public Briefing is an occasional white paper series by the Public Works program of Demos. These papers include summaries of research and reports as well as essays and articles related to the work of the program.
Key findings from the first round of cognitive interviews.