April was Fair Housing Month and was acknowledged at least as a passing milestone of how far we have come with regards to equal and fair housing. The issues of race, color, gender, national origin, religion, familial status and sexual orientation have been amended and ingrained in the act/law over time. But there is one class that still faces the challenges of access, financial equity and stability. (I know what you are thinking: Mabél, everyone IS covered.) Well, how about homeowners in general?
In this challenging market, the homeowner is under siege by an unregulated system that created an economic downfall where homeowners and those who wish to acquire property are faced with economic inequality.
FHA loans not welcomed here! So says one bank (Bank of New York—see how much they took in TARP Funds) to a buyer who wishes to purchase a foreclosure. We don’t like these 203k loans and are not willing to cooperate. The property in question is a single-family home that was originally listed at $274,900, then reduced to $165,000, then reduced to $156,900 and then again reduced to $149,900. I wonder why it hasn’t sold? The buyer can move on, but the homeowners in the immediate area—mmm, nope.
The homeowner is watching the forced depreciation of their community brought about by the same folks who refuse to sell because of the type of loan you choose to use. The community is now at risk of losing more and more value each and every day the bank (check out the I hate banks sing-a-long) decides not to accept offers that use an FHA loan. Sure, it’s their right, but what about the right of the buyer, the homeowners in that community, the neighborhood itself? As these foreclosures mount, they bring down the communities. How “fair” is this?
The debate about these communities continues, as banks have given loans to people who should have never have been given loans. Here’s a case study. I recently participated with fellow Board member Zeke Morris (drop him a line on Facebook) in indexing the Auburn Gresham community, a lovely neighborhood a vibrant commercial corridor on 79th with rich housing stock. Upon researching vacant properties in foreclosure, I found an interesting pattern: There were loans that closed within days of each other and for similar amounts that all went under. Certain individuals were gaming the system. Within the first two weeks of acquiring a loan, they went ahead and acquired two to three loans, with the help of identity theft and scrupulous lending practices. They were pariahs in these those communities that were working hard to keep their homes’ value and the community sharp. Again, how “fair” is this?
It’s easy to point a finger at someone at a solid target, the homeowner, but it’s harder to hit the correct one: pariahs and unregulated lending practices. Auburn Gresham has 54% owners and 45% renters versus Edgewater (where the foreclosed property referenced earlier is located), with 76% renters and 24% owners. They say homeownership stabilizes communities and gives families a firm foundation. Based on this, Auburn Gresham is as solid as they come. Unfortunately it became a target where affordable housing was dealt a crushing blow. Once again, how “fair” is this?
So before we leap to celebrate Fair Housing, let’s look at the State of Housing and Homeownership and see exactly how fair it is. What do you think? I could just be in bad mood and do not realize it, or am I onto something—homeownership as a protected class for all!
Let me have it and...