Page 419 - untitled

 FINANCIAL CRISIS INQUIRY COMMISSION REPORT

years. The surge in foreclosed and abandoned properties dragged home prices down
still more, depressing the value of surrounding real estate in neighborhoods across
the country. Even those who stayed current on their mortgages found themselves
whirled into the storm.
Towns that over several years had come to expect and rely on the housing boom
now saw jobs and tax revenue vanish. As their resources dwindled, these communi-
ties found themselves saddled with the municipal costs they had taken on in part to
expand services for a growing population. Sinking housing prices upended local
budgets that relied on property taxes. Problems associated with abandoned homes
required more police and fire protection.
At FCIC hearings around the country, regional experts testified that the local im-
pact of the crisis has been severe. From  to , for example, banks in Sacra-
mento had stopped lending and potential borrowers retreated, said Clarence
Williams, president of the California Capital Financial Development Corporation.
Bankers still complain to him not only that demand from borrowers has fallen off but
also that they may be subject to increased regulatory scrutiny if they do make new
loans. In September , when the FCIC held its Sacramento hearing, that region’s
once-robust construction industry was still languishing. “Unless we begin to turn
around demand, unless we begin to turn around the business situation, the employ-
ment is not going to increase here in the Sacramento area, and housing is critical to it.
It is a vicious circle,” Williams testified. 
The effects of the financial crisis have been felt in individual U.S. households and
businesses, big and small, and around the world. Policy makers on the state, national,
and global levels are still grappling with the aftermath, as are the homeowners and
lenders now dealing with the complications that entangle the foreclosure process.

HOUSEHOLDS: “I’M NOT EATING. I’M NOT SLEEPING”
The recession officially began in December . By many measures, its effects on
the job market were the worst on record, as reflected in the speed and breadth of the
falloff in jobs, the rise of the ranks of underemployed workers, and the long stretches
of time that millions of Americans were and still are surviving without work. The
economy shed . million jobs in —the largest annual plunge since record keep-
ing began in . By December , the United States had lost another . million
jobs. Through November , the economy had regained nearly  million jobs, put-
ting only a small dent in the declines.
The underemployment rate—the total of unemployed workers who are actively
looking for jobs, those with part-time work who would prefer full-time jobs, and
those who need jobs but say they are too discouraged to search—increased from
. in December  to . in December , reaching . in October
. This was the highest level since calculations for that labor category were first
made in . As of November , the underemployment rate stood at . The
average length of time individuals spent unemployed spiked from . weeks in June
 to . weeks in June , and . weeks in June . Fifty-nine percent of