leftfielder.org

This article, a lead story on Yahoo News, talks about how Stockton has the highest foreclosure rate in the country right now.  My parents happen to live in Stockton, and so I have insider information here. While I don’t mean to trivialize the plight of those who’s subprime mortgages are ruining their lives, this article is horribly misleading. Because the real problem isn’t with family’s owning houses – but real estate companies.

At the boom of the housing market, a number of small real estate companies started putting up gated communities near Stockton – anticipating a need for affordable housing in nearby San Francisco.  They did quite well, and this industry boomed.  Soon, thousands of homes were being built on what used to be farmland, because the companies assumed there would be plenty of buyers.  Then the market crashed, and there were no buyers.  And the companies were left with hundreds of unsold homes, and crushing debt.  When the company that built the house goes under, it forecloses on all 500 properties it owns that have never been purchased by individual families.  And that artificially inflates the foreclosure statistics to make it look like lots of families are losing their homes.

You would never get that picture from reading the article, which does a great job of tugging at heart strings with anecdotal evidence.  Its still a bad thing that developers are going out of business, but its a very different problem, and one that the media is ignoring entirely because its not as sensational a story as inflated statistics about families getting kicked out of their homes.  Bad Media.  Very bad media.

I recently heard that my former employer is offering a new sort of “insurance” service. The Plan format sounds familiar: for a monthly fee, with an annual commitment and payroll deduction through your employer, you are able to consult with an in-Plan specialist with no fees or deductibles. But the specialist is a lawyer, who can advise you on anything from wills to home sales to traffic tickets.

Is this a good thing? I can see where it could be helpful in negotiating the legalities of life, particularly with property, wills, etc. But my gut response is disgust.

First, are we really at the point where the average middle-class American needs to consult with a lawyer every year? I’ve never consulted a lawyer so far in my life, and while I’m sure it’ll be necessary in a few places, I’d like to think that I don’t need it regularly.

Second, will this end up doing the same thing to law that it has to medicine? With unlimited insurance, people tend to go to doctors for trivial reasons, and drive up the cost of health care for everyone by demanding unnecessary treatment. I can see the same things happening here. If I could consult with a lawyer any time I want for free, I’m sure I could find plenty of places where I’d use the service. And the lawyer would be likely to point out the many places I could use his services, of course.
Third, the list of exceptions is a mile long. The last thing I need is another program where I have to spend 2 hours figuring out whether the problem I have is covered by my insurance.

For reference, the monthly cost is $18.75. It requires a year-long commitment, and will not cover “pre-existing conditions.”