Posted on 11/09/2003 1:04:24 PM PST by Willie Green
For education and discussion only. Not for commercial use.
Wichita — Home foreclosures in aviation-dependent Wichita have soared in the past two years as more families struggle to make ends meet in this hard-hit Midwest manufacturing community.
On average, between 30 and 40 Wichita families each week are losing their homes at sheriff's auctions in the Sedgwick County Courthouse.
Extended unemployment benefits and family savings have run out for thousands of laid-off aircraft workers and others who still are having a hard time finding jobs two years after the Sept. 11, 2001, terrorist attacks triggered massive layoffs in Wichita's four aircraft manufacturing plants.
The foreclosures come after years of easy mortgage money driven by low interest rates and increased competition. Lenders were compelled to offer low or no down payments, lower income qualifications and second mortgages -- often at more than home value.
As of Oct. 1, Sedgwick County had recorded 1,231 foreclosures of homes and businesses -- far outpacing all of last year and twice the number of foreclosures in 2000, according to figures compiled by Security Title in Wichita. Most of those were home foreclosures, the company said.
The recession still has a tight grip on this city, which is home to plants for The Boeing Co., Cessna Aircraft, Bombardier Aerospace and Raytheon Aircraft. The companies have cut more than 14,000 jobs since aircraft sales went soft in 2001.
Aircraft workers hit
Tim Schweitzer, 26, was laid off from his job as a sheet-metal worker at Boeing in December 2001 after five years with the company. His wife, Kristie, 25, lost her job as a stockroom clerk at Cessna in March 2003. Both were second-generation aircraft workers.
For months, the Schweitzers scrambled to make their $687 monthly mortgage payment, at times getting behind and then catching up again when a tax refund check or job severance money came in.
The Wichita couple had saved money for a year before scraping together enough in 2000 to buy their first house, a $70,000 brick home with a yard that was in their price range.
"We wanted to have something of our own when we got married," she said. "We were both making pretty good money."
They got to live in the house for three years.
In May, the couple and their two daughters -- Kinsey, 5, and Haylie, 2 -- moved to a rented house owned by Tim Schweitzer's father. They signed their house's deed over to the mortgage company.
"There was no way we would be able to sell the house for what we owe on it," Tim Schweitzer said.
State higher than average
In Kansas, 1.15 percent of mortgage loans were in foreclosure proceedings as of June 30, according to figures compiled by the Mortgage Bankers Association of America in Washington, D.C. In addition, more than 4 percent of mortgage loans in Kansas were delinquent.
Those figures are based on 254,376 loans, representing the majority of mortgage lenders in the state tracked by MBA economists.
The state's foreclosure rate was slightly higher than the national rate of 1.12 percent in the second quarter of this year. The national delinquency rate on mortgage loans in the quarter was 4.48 percent.
Jobs are key
"Obviously, the key thing in delinquency and foreclosure is jobs," said Jay Brinkmann, vice president for MBA's Department of Research and Economics. "It takes a paycheck, sometimes two paychecks, to support a house."
In Wichita, foreclosures bottomed out in December 1993. Since then, there has been a slow but steady increase, spiking in 2001 and 2002 amid the aircraft industry layoffs.
In 2000, Sedgwick County recorded 620 foreclosures. By 2001, that figure rose to 901, and in 2002, it climbed to 1,049. By September of this year, the number of foreclosures already had reached 1,231.
"Filings have picked up and become more volatile since the recession, but the increase started long before then," said Stanley Longhofer, director for Wichita State University's Center for Real Estate.
Hard to catch up
During the good years, more people took out second and third mortgages. Bigger mortgages were easier to come by as income qualifications were lowered.
All of that, coupled with missed payments, back interest, late fees, attorney fees and other costs, can make it difficult for homeowners to catch up once they get behind on house payments, he said.
As for the Schweitzers, both have gone back to school -- he to study computer science, she to study cosmetology -- while they hope their unemployment benefits hold out. His benefits run out next month, just as he completes his final semester.
They dream of owning a home again.
"We are trying to use this as an opportunity," Kristie Schweitzer said. "We are trying to decide the best way to go so we don't get ourselves in a position where we get laid off and lose our home again."
Actually ... I don't see much difference between them ... I am a Constitutionalist with protectionist leanings. Both Madison and Monroe spoke of the benefits of protectionism
Yes ... sans unions ... but also sans sweatshop /child labor/ company store/ monopoly and especially GLOBAL mentality. American MUST take care of our own FIRST
BTW ... I'm not especially enamoured with Lincoln ...
It should not be that hard to come up with $687 a month that they would end up losing their house. Certainly there are other expenses, but with the mortgage at the top of the list, everything else comes after.
In response to your particular situation, I know it is tough. I have been there. Out of work, unemployment compensation wholly inadequate. Bank sending notices. Creditors calling. Had to take a job on a temporary basis that paid a whole lot less than I had been making.
We got out of trouble by making major budget cuts.
-Food bill was down to $35.00 a week for family of three.
-Cut out every other non-essential expense.
-Dishwasher became a drying rack, Never turned on.
-Clothes line instead of clothes dryer.
-2 minute showers.
Electric bill went from $180 a month down to under $50 a month. Gas bill went from $65.00 to $11.00 a month.
To save on home supplies, we did things like use the plastic bags they give you for free when they pack your groceries in instead of buying plastic bags. Cut our waste down by buying things like concentrated OJ instead of the big gallons containers that took up a lot of room in the trash can. That eliminated the need for trash service. We just packed small bags of trash to public recepticles.
We actually found we could get by like that and have some money left over at the end of the month.
I hope you can make it out of your situation okay. Don't mean to sound uncaring. Just trying to point out that there are a lot of ways to save money.
I got news for you. The U.S. is pretty much now a third world country for many people. And that was not a description of poverty. Poverty is when you have to unplug the refridgerator 'becuase you can not afford the electricity.
Anyhow, despite your tone (and perhaps mine), I'm quite certain we agree on this issue. It is sad how many jobs are going overseas - mostly to China - and how many Americans with once good paying jobs are being forced to use the dishwasher only as a fancy drying rack.
The economic boom in China is phenominal. And the Chinese are buying dishwashers, plugging them in and turning them on.
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