Weekend Economists Chart the Bradbury Chronicles, June 8-10,2012

[Demeter]

44. 40 Million Strong: Underwater Homeowners Can Fight And Win ... If They Get Organized

http://www.nationofchange.org/40-million-strong-underwater-homeowners-can-fight-and-win-if-they-get-organized-1339168763

It sounds like hype to say it, but underwater homeowners can change the course of history. It's not me saying that - it's the numbers. People who owe more than their homes are worth have the power to become the a powerful new political and economic force. They've got the numbers, they've got the votes, and - if they can get organized - they've got the economic clout. And we can prove it....A new and more accurate study by Zillow shows that the number of underwater homes is higher than we had thought, and that that 16 million homes are underwater. If those households are the same size as the American average, then the average number of people living in them is 2.6. (I thought it might be higher, but I cross-tabulated some Census Bureau numbers and came up with 2.63.) That's more than 40 million people.

40 million people is more than the population of Connecticut. Of Iowa. Of Mississippi. Of Kansas, Arkansas, Utah, Nevada, New Mexico, West Virginia, Nebraska, Idaho, Maine, Hawaii, New Hampshire, Rhode Island, Montana, Delaware, South Dakota, Alaska, Vermont, North Dakota, the District of Columbia, and Wyoming ...The number of people living in underwater homes is larger than the number of people living in twenty-two states and the District of Columbia. The residents of those states are represented by 44 Senators. The number of people living in underwater homes is greater than the entire population of California, our largest state.

How many voting-age people live in underwater homes? Statistics are hard to come by, but if we assume it's 1.5 voters per household here's the figure we get: 24,000,000 voters. 132,618,580 people voted in the last Presidential election. That means these homeowners could account for as much as 18 percent of all voters - if they all turned out to vote. It also makes them one of the largest potential voting blocs in the country....They could become an equally powerful financial force, too. We don't normally think of underwater homeowners as having economic clout, but they do - if they get organized. How much clout? Zillow now estimates the underwater portion of their mortgages at $1.2 trillion. That's "trillion," with a "t." And that's just the lost value in their mortgages. But their clout doesn't just extend to the mortgage amount that's underwater. It involves the whole amount owed to the banks. Another data group, Core Logic, reported at the end of 2011 that the average "underwater" amount on these homes - the difference between what was owed and what the home is worth - was $64,000. But the average total owed was $252,000. If these ratios are still accurate, then we can multiply that $1.2 trillion by four to get the total amount these underwater homeowners owe banks: $4.8 trillion.

To paraphrase an old saying, if one person doesn't pay their mortgage it's a tragedy. If 16 million don't pay, it's a freakin' revolution.

When you do it, it's immoral. When they do it, it's "strategic."

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