Can low-income individuals and families actually own housing, rather then simply renting a home?
For a lengthy honeymoon period leading up the the 2008 ‘Great Recession’ low-income Americans were invited on a honeymoon cruise with the American Dream of home ownership.
How come? Banks and other financial institutions were desperate to maintain a housing finance boom, to the point of offering riskier and riskier loans to home-buyers with little collateral.
Which brings up a question: did the banks care about their underfunded mortgage clients? They didn’t. In part because they didn’t have to.
That’s because the mortgages were packaged up and sold onward to speculators, who could repackage and sell the mortgages onwards to other investors, until neither buyers or sellers could possibly calculate the actual underlying value of the paper they were trading.
When the re-packaged mortgage bubble burst, speculators were ruined. When the speculators were governments (and some were), governments were ruined. Also ruined were entities charged with helping provide mortgages to homebuyers with lower incomes: Fanny Mae and Freddy Mac.
In the midst of catastrophic financial market losses, who cared about the fate of tens of thousands of low-income homeowners and their all-too-brief flirtation with home ownership?
Nobody.
As mortgage payments increased along with interest rates, struggling home-owners with their mortgages financially “below water” abandoned their housing or experienced foreclosure by the tens of thousands.
Which brings us to Chicago today, and to a financial institution that is actually concerned with helping low-income owners survive and prosper in their owned homes. The North Side Community Federal Credit Union is out to prove that at least one financial institution cares in Chicago.
Read more in Next City: Can The Affordable Condominium Survive In Today’s Chicago?
