Monday, January 24, 2011

The new feudalism

The job market hasn't been kind to ex-banker Joe Farkas, but the real estate market has been worse.

Once a senior finance executive for Bank of America in Latin America, he lost his position in December 2007. That was two years after he and his wife paid $750,000 for a large home in Miramar that's probably worth about half of that now.

Now Farkas, 53, sees his underwater mortgage as something of a career anchor, too. He would pursue jobs across the country if it weren't for the financial hit he'd take by selling the house for a loss.

. . . Farkas' financial dilemma helps explain why unemployment remains particularly stubborn even as the economy recovers, analysts say. With housing values depressed, the labor market remains unusually static as many of the unemployed can't afford to move in pursuit of a job.

Obama's administration addressed the foreclosure crisis as primarily a problem for the under secured banking industry, rather than as a problem of upside down homeowners.

As a result, we have a new form of feudal serfdom - - workers tied to inescapable home loans.

No comments: