14 percent of the approximately 52 million residential mortgages outstanding in the U.S. were delinquent in the first quarter. This amounts to 7.3 million mortgages. Only 5.5 percent were on nonaccrual status, however. This amounts to 2.9 million mortgages. Nonaccrual means the lender is no longer posting income on the loan. Depending on the length of time the loan has failed to accrue, foreclosure proceedings may have already begun (with eviction to follow at some point), but not necessarily. Assuming that all loans on nonaccrual status represent vacant properties, it means at least 4.4 million (7.3 – 2.9 = 4.4) are occupied by people who are not paying for them, for whatever reason. This number has increased by 3 million since the end of 2007.

I’ll note that if we presume that each household contains around 2.5 people (I don’t know whether households in foreclosure tend to be bigger or smaller than others), that works out to 11 million people. Other “squatter” estimates are similarly big. Moody’s Economy.com has guessed that 6 million people continue to live in their homes during delinquency or foreclosure, and a further 1 million are undergoing mortgage modification. Regardless of the exact count, it underscores the severity of the ongoing foreclosure crisis and the parlous state of the housing market — as well as the need for Congress to press for principal reduction.

Here’s Hungry Hungry Hippos:

While the story that Flint, Michigan, is considering bulldozing entire neighborhoods, blocking them off, and withdrawing city services from them is a sad and stark indicator of what’s happening in cities where the combination of the declining auto industry and the mortgage crisis are causing large population shifts, I’m not sure why Mary Kane thinks federal dollars would help avert it, or even why she thinks averting it is a good idea.

What interest does the federal government have in the city limits of Flint, Michigan?  What interest do we, as a society, have in keeping the residents of Flint, Michigan, living in Flint, Michigan, when their reason for being there is gone?

None, as far as I can tell.

Actually, I’m not talking about averting anything, and I’m sorry to have given that impression. Flint and other cities facing blight and looking to shrink their cities as a result may be going down exactly the right road. And, frankly, they may have little choice. But here’s the hard part: Reclaiming properties, tearing down blighted neighborhoods, reusing land on a large scale, and planning  for reconfiguring a city will take the kind of money many of these hard-hit places don’t have. They’ll need land banks, which are public authorities that can do these sorts of things. And those land banks need major resources and money from the government to reach the kind of capacity that will allow them to handle all this responsibility.

Flint is a leader in the shrinking-city movement because it has the Genesee County Land Bank, which is a model for the rest of the country. But as we’ve written, other communities are only now beginning to plan for land banks, and it can be a lengthy and expensive process to get one up and going. It took almost two years in Cleveland, where the foreclosure and abandonment crisis has been particularly severe. Unless the government gets behind these efforts, it’s like fighting a million-acre forest fire with a pick and a shovel, as housing expert Alan Mallach told us.

Mallach thinks the crisis requires a federal land bank. That may be a long time in coming, if it ever comes at all. Like Flint, other communities may be ready to join the shrinking city movement. But being ready – and having the money to actually make it work – are still two different things.

At Mish’s Global Economic Trend Analysis, blogger Michael Shedlock passes along a chilling consequence of the emptying of American cities. In Flint, Mich., city officials are considering simply cordoning off mostly abandoned portions of the city, and no longer providing city services there, or asking the few people still remaining to leave.  It’s like something out of one of those futuristic horror movies.

From MLive, the blog of the Flint Journal, via Shedlock:

Property abandonment is getting so bad in Flint that some in government are talking about an extreme measure that was once unthinkable — shutting down portions of the city, officially abandoning them and cutting off police and fire service.

Temporary Mayor Michael Brown made the off-the-cuff suggestion Friday in response to a question at a Rotary Club of Flint luncheon about the thousands of empty houses in Flint.

City Council President Jim Ananich said the idea has been on his radar for years.

The city is getting smaller and should downsize its services accordingly by asking people to leave sparsely populated areas, he said.

I haven’t heard of anything like this before.

People get outraged by AIG bonuses, and taken aback by bank failures. To me, the abandonment of America’s cities — and the complete and utter failure of Washington to recognize it for the crisis it has become — is the shocking part of foreclosures and the financial meltdown.