WASHINGTON — The nation's economic fortunes have been a roller coaster ride for many since the fall of Lehman Brothers triggered financial chaos around the world.
In the months that followed, economic turmoil spawned massive job losses, an infusion of billions from the government to stimulate the economy, to save banks and to bailout corporations. Then there were programs to stem mortgage foreclosures, to expand unemployment insurance, to create "Cash for Clunkers" and more.
While many Americans suffered, others thrived. Here then are a few stories about the winners and losers in the recession of 2009.
Isaac Dailey was hoping to get a reverse mortgage in October to make his retirement years a little more comfortable.
At the time, he figured it would be a cinch. He'd lived in his Washington, D.C., condominium for more than 30 years and he was making his mortgage payments on time. Now, nearly a year later, Dailey, 82, is still waiting for the loan as his chances become more remote with each passing day.
"When it started, I thought it would be so simple. But for some reason or another, I just can't seem to get the reverse mortgage and that's really all I want."
It turns out that Dailey didn't have enough equity in his home to qualify for a reverse mortgage.
His mortgage payoff amount was too high to meet the loan-to-value requirement for the reverse mortgage.
That's because most of the equity in his home had been stripped through two refinance loans Dailey had taken out in 2006 and 2007.
The mortgage broker who handled the loans told Dailey they'd would lower his monthly mortgage payments at a secure fixed interest rate. They didn't, however: The loans were adjustable rate mortgages, and Dailey's monthly payments have been rising right along with his interest rates.
"I was given the wrong information," said Dailey, a retired federal employee. "In this (current) ARM, they raise the mortgage every six months. They just raised it in July by $39, and in another six months they'll probably raise it again. I just simply want out of this and to get a reverse mortgage and be done with this mess," he said.
Dailey's problem loans pre-date the subprime mortgage meltdown, which began two years ago, but his troubles have deepened because of the collateral damage from the housing crisis — falling home values. D.C.-area mortgage broker Faith Johnson said that Dailey's home has probably depreciated by $100,000 from its peak value of $150,000 to $160,000 several years ago.
Johnson has been trying to get the lender and loan servicer to modify Dailey's mortgage and reduce his loan payoff amount. She's having a hard time, however, because Dailey's fixed income isn't enough to qualify for loan modification programs.
After asking the U.S. Attorney's office for help, Johnson said she recently contacted the lender about modifying Dailey's loan. The bank requested more information about his income — the same information she provided several months earlier.
"I think they're just going to tell them the same thing they told me, that he doesn't qualify for a modification because of his income," Johnson said.
For now Dailey remains in limbo. He's making his payments, but it's getting harder as they rise and his income stays the same. Every time his interest rate increases, he moves closer to foreclosure, a prospect he never anticipated in what should've been his golden years.
General Motors and Chrysler filed for bankruptcy. Car dealerships closed left and right. Consumers couldn't get financing. And those who could were too afraid about losing their jobs to spend big money on new cars.
Then the Obama administration unveiled a program with a cheesy name that would be a godsend to auto manufacturers, retailers and buyers. The "Cash for Clunkers" program was a jolt of financial adrenaline that led to the first year-over-year increase in monthly auto sales in nearly two years.
And no company cashed in like AutoNation, the Fort Lauderdale, Fla., firm with 239 auto dealerships in 15 states.
As the nation's largest auto retailer, AutoNation outlets moved 13,000 new cars under the Clunkers program and are awaiting $54 million in program rebates. The next closest competitor moved roughly 4,000 cars, said AutoNation spokesman Marc Cannon.
The company could've sold another 600 to 700 cars if participating dealerships had continued the Clunkers program until its official end on Aug. 24. Cannon said their dealers halted the program on Friday, August 21 to allow ample time to complete paperwork.
The Clunkers program boosted AutoNation sales by 25 percent and showroom traffic increased by more than 30 percent. Most of the new customers had solid credit scores, averaging 700-plus.
"We were finding that customers who came in for Cash for Clunkers were people who had no negative equity on their vehicles," said AutoNation chief executive Mike Jackson. "They were people who held onto their vehicles for a long time. They had good credit. They were basically people who were frugal and conservative who didn't see the need to get a new car every five years."
While auto industry sales are expected to dip this month, the boost provided by the Clunkers program helped save many dealerships from going out of business.
"It was a big win and we really capitalized on this program," Cannon said . . . "It gave the American consumer the mindset that it's OK to start to shop and buy again. And we think it was a big boost not just for the American consumer, but for the morale of dealerships. They finally saw opportunities with people coming back in."
In 2006, Lisa Davis of Cleveland took the risky step of leaving her secure job as a city maintenance worker to start a grassroots nonprofit organization, Network for Neighborhood Success.
It wasn't easy walking away from her job of 17 years, but years of volunteer work had convinced her that there were greater needs in the community she could no longer ignore.
"This was my passion and I was eventually going do it anyway," Davis, 46, explained. "When you live in an urban area, you see a lot of people struggling with issues. It could be drugs, schizophrenia, a lack of compassion and caring, AIDS. There's only so much you can close your eyes to and I just couldn't continue to act like I didn't see it."
With $40,000 in personal savings and money from family and friends, Davis and her supporters began work on a variety of programs that, she hoped, would one day provide income and help make the organization self-supporting.
One of the group's main projects was establishing three block clubs in the troubled Kinsman neighborhood. With Davis' help, the clubs' members patrol the glut of abandoned, foreclosed homes in the area, making sure they don't fall into disrepair and become magnets for drug use, garbage and vandalism.
Even before the subprime mortgage meltdown, Cleveland was already struggling with an epidemic of home foreclosures as the area's economy nosedived and mounting job losses forced thousands of residents to lose their homes.
Just as Davis' fledgling group began to establish itself in the community late last year, it was already getting tough to secure funding as charitable and philanthropic giving dried up with the sour economy.
The funding shortage not only forced programming cutbacks, it also forced Davis to raid her 401K to make ends meet and pay her monthly $600 mortgage. Today, her savings have been exhausted, she's a year behind on her mortgage and her home is in foreclosure.
When she gets the notice that the home is up for auction, Davis will be out on the street and the block club members she helped recruit will have to patrol her home so it won't become just another abandoned neighborhood eyesore.
"The hardest part is not knowing when they're going to say 'Lisa, you've got to get out of your house today. The sheriff is coming.' You don't know what day they're going to knock on the door or when you're going to get that letter," Davis said.
Because she has no income, Davis isn't eligible for loan modification programs. There's little chance of getting her old job back. The city of Cleveland is laying off workers.
So Davis is looking for work in the nonprofit sector she loves and is still holding out hope that some of the grants she's applied for will come through for her organization, which, like Davis, is also struggling to survive.
"You just have to have hope and faith that things are going to turn around," Davis said. "It's something inside me. I just know that I'm doing the right thing. And when you see people and you're helping them with their situation, it gives you hope that eventually yours is going to work out also."
The American Recovery and Reinvestment Act has its share of critics, but the bill funds projects that have kept tens of thousands of construction and transportation workers on the job.
All 50 states and the District of Columbia met a summer deadline to assign 50 percent of their recovery act funds to specific highway projects, according to the American Association of State Highway and Transportation Officials.
The Federal Highway Administration reports that by Aug. 28, 3,351 transportation construction projects funded by the stimulus bill were already under way.
These include the $174 million Fairfax County Parkway extension in northern Virginia. Construction on two of project's four phases should be completed next year.
While the bulk of ARRA-funded construction projects are still on the drawing board, they should provide jobs and boost employment for the remainder of the year and into 2010. Already, nearly $10 billion in transportation construction projects are under contract, with more than 7,700 authorized for bidding.
In Tennessee, $5.3 million in total payroll had gone out on stimulus projects as of July. In North Carolina, nearly $3 million in payroll has gone to stimulus projects while similar projects in Kentucky and Mississippi have provided workers in each state with nearly $2 million in payroll.
In Arkansas, which gets $351 million in ARRA funds, about $162 million already has been awarded on 69 projects — and more than a third are already complete.
"We're putting people to work in every corner of our state," said Dan Flowers, the executive director of Arkansas' State Highway and Transportation Department. "The majority of our projects are being built in economically depressed areas, which benefits those looking for work."
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