Related: California reeling from the foreclosure crisis

Profiles: Stigma compounds stress

Thursday, July 21st, 2011 

The Investigative Reporting Workshop and New America Media profiled those hardest hit by the foreclosure crisis in communities of color.

PUBLISHED WITH
New America Media

CUPERTINO, Calif. — Rajesh Patel may not seem to be a a likely candidate to fall behind on his mortgage and lose his home. He is a senior engineer at a large Silicon Valley company and owns three properties in the San Francisco Bay Area.

But earlier this year, on the brink of foreclosure, the 47-year-old Patel (who asked that his real name not be used) cashed in half of his retirement savings to pay off what he owed the bank in overdue mortgage payments on his Saratoga home.

This was only a stopgap solution, however; Patel said he still has cash-flow issues and no clear strategy on how he is going to avoid foreclosure.

“I came to this country to study and settle, and just like everybody else, I believed in the U.S. economy,” he said.

Patel, like his neighbors and co-workers, invested in stocks and real estate during boom times. But over the past two years, he has seen his investments erode in value and his homes depreciate. The rental income from his two other properties barely covers the mortgages on them, and he is unable to sell the properties because of the taxes he will have to pay.

He still lives in his five-bedroom Saratoga home, but knows that he will have to move soon.

“My family is stressed out,” he said. “We live in a good school district, and we might have to relocate to a less desirable area.”

The social stigma of his situation is adding to Patel’s ordeal. He knows that the perception of normalcy counts for a lot within the Indian community. He says he’s under tremendous pressure to maintain his family’s lifestyle.

"I might have to work through friends to find somewhere suitable to live, but that is a last resort,” he said.

In the well-do-do enclave where he lives, Patel says, an Indian undergoing foreclosure is almost unheard of.

He is still working with Wells Fargo to negotiate a short sale of his property and has hired a lawyer to help him.

“This is the better option for me. Right now, I’m current on my loan, and I hope the bank will see that and allow a short sale,” he said.

The hidden long-term cost of his real estate woes is his credit rating. If he ends up losing his home to foreclosure, his credit rating will be hit for seven years.

“This would be bad for the future since I have one son in college and another going into middle school,” he said.

Patel is hopeful that his story will deter others from taking too many risks.

“I have really seen ups and downs. Unless unemployment and the housing market improve, we are all in trouble. At the end of day, my kids and family get priority. I will do what it takes to give them security, whether it is living in an apartment or a smaller home.”

 

What Went Wrong

Donald Barlett and James Steele are revisiting America: What Went Wrong, their landmark 1991 newspaper series, in a new project with the Investigative Reporting Workshop. Over the next year, the project team will examine how four decades of public policy has shaped America's ongoing economic crisis.

Issues

Back Story

The authors talk about What Went Wrong

Donald Barlett and James Steele talk about the project, and why they decided to revisit a book they wrote two decades ago, in a series of video clips produced by the Workshop.

Nation's Story

Who pays the taxes?

Who pays the taxes?

We feature charts, maps, photos and other visualizations that reflect the state of the economy as part of our What Went Wrong project. This column chart shows the growing disparity between what individuals and corporations pay in taxes. In the 1950s, the difference was 22 percent. Recent figures show the difference is 62 percent.

Rags to rags: Economic mobility hard to come by

New Pew Center on States report confirms that moving up the American economic ladder is difficult, even though most people have more income than their parents.

Homelessness takes it toll on Florida's youngest

Florida, as a center of the housing boom, still struggles to recover from the Great Recession. Financial stresses and widespread foreclosures have placed families in precarious situations, resulting in a spike in child homelessness. Susannah Nesmith reports in the Broward Bulldog.

Older workers face challenges in Silicon Valley

An advanced degree and experience in the tech sector should be a ticket to a job in today's economy. But older workers in the heart of the new economy, Silicon Valley, are finding their resume is not the issue. Aaron Glantz reports in The Bay Citizen.

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Read an Excerpt

The Betrayal of the American Dream on Google Books

The Betrayal of the American Dream on Google Books

Check out the first chapter of Barlett and Steele's 2012 book here.