Home foreclosures nationally last year rose 42% to a record of .54% of Americans with a mortgage facing foreclosure in the last quarter of 2006. According to a report from the Mortgage Bankers Association, Michigan, along with Indiana and Ohio, is now leading the nation in foreclosures with a foreclosure rate of 2.39% and a delinquency rate of 7.87% in last year’s final quarter.
Last January alone 11,554 Michigan homes were foreclosed upon – one for every 366 houses in the entire state. In only one year, this amounts to a 147% increase. Facing the highest levels of foreclosure in the state are the working class communities of Wayne County; the county which encompasses the city of Detroit. In January Wayne County reported 6,653 home foreclosures or one filing for every 124 households – a 50% increase from only the previous month. Currently in a number of Detroit neighborhoods, more than half of the homes on the market are foreclosed properties. Even in the relatively more affluent neighboring counties of Oakland and Macomb, the rate of foreclosures has risen 338% and 108% respectively in the past year.
The national rise in the rates of foreclosure have largely been attributed to the explosion in recent years of predatory, and often fraudulent, sub-prime lending practices in which lenders have intentionally confused working class borrowers with low-credit about the amount they would ultimately owe and encouraged them to take out loans far beyond what they could afford.
In Michigan in particular, however, the recent explosion of foreclosures is symptomatic of the state’s economic fall-out resulting from the race to the bottom of its top employers. Since 2001 Michigan has lost 336,000 jobs. Over 40% have come from layoffs by automakers and automotive suppliers resulting in the loss of one in three Michigan plant jobs since 1999. Following the Ford Motor Company’s decision to eliminate 40,000 union jobs, the Chrysler corporation announced plans to cut 13,000 North American jobs followed by a threatened sell-off of the company. In the same month of March, pharmaceutical conglomerate Pfizer announced plans to shut down its Ann Arbor research facility and export 2,100 Michigan jobs
While Michigan workers bear no responsibility for their executives’ reckless business decisions or the endemic crises of the profit system, it is Michigan workers who are forced to sacrifice their livelihoods while each of the executives and major shareholders of these companies walk away with millions, if not tens of millions of dollars. Neither the state of Michigan nor the United States as a whole provides any kind of social safety net on par with even the rest of the developed capitalist world. While our ruling class can reap short-term profits from these lay-offs, wage-cuts, and foreclosures, the Michigan workers who created the wealth lining their coffers are now threatened with poverty, unemployment, and in many cases homelessness.
The Michigan Emergency Coalition Against War and Injustice (MECAWI) has recently introduced a proposal calling on Democratic Governor Jennifer Granholm to exercise provisions of the Michigan Constitution which would allow her to declare an emergency moratorium on home foreclosures and plant closures and lay-offs. While we fully support these demands, we also recognize that they will be unable to find any expression through the Democratic Party which is nothing less than an instrument of the class responsible for these escalating social disasters. The Socialist Party calls for an immediate end to home foreclosures, a 100% capital flight tax on all corporations and capitalists who attempt to leave the state and unemployment compensation at 100% of a workers previous income for the full period of unemployment or retraining. We further call for the automotive industry and pharmaceutical industry to be placed under public ownership and worker control and for the nationalization of the banking industry in the interests of human needs rather than private profits.
Reliance on corporate politicians or the dictums of union bureaucrats is a dead-end that can only result in increased betrayals and the escalation of attacks on the rights and living standards of working people. The only avenue for reversing this decline, much less establishing a social safety net, is a movement of mass strikes, direct actions, and independent political mobilization by Michigan’s working class.