Foreclosures: Looking Below the Surface

Think the sub-prime mortgage meltdown is something 'new'?

Generally, our current crisis is compared to the Great Depression, but there is a more recent and more related corollary in what is called 'contract mortgages'. I learned about this over the past couple of weeks, watching Beryl Satter, a professor at Rutgers University, author of the book, Family Properties: Race, Real Estate, and the Exploitation of Black Urban America.

Dr. Satter's father Mark was a Chicago attorney who fought against the practice of white real estate entrepreneurs 'invested' in purchasing properties in transitioning communities buying them at low prices and selling them 'on contract' to African-Americans at exorbitant prices while holding the title. The new homeowners were responsible for maintenance and insurance, for the most part, just barely able to afford the inflated mortgage costs, most often unable to afford maintenance costs or insurance. In the meantime, the person holding the contract, could sell the paper to another investor, thereby making a profit.

Think urban sharecropping (you can see a longer version of another presentation here)...

[Beryl] Satter's story is incredibly interesting. It is, indeed, a story of greed, individual and institutional racism, but neither the villains or victims are as sharply defined. White homeowners who fled deteriorating neighborhoods, were not, in many cases, fleeing because they didn't want to live next to black people - they had the resources to escape plummeting home values. Blacks who were unable to keep up their properties, were not, in many cases, lazy, or lacking pride in their homes, they were being charged as much as three times the actual value of the house, being led to believe that they would one day actually 'own' the home. Speculators, financial institutions and even the federal government, were actually more culpable than many of the people the general public list as 'the cause' for urban blight.

Our attitudes toward low income neighborhoods are often shaped by personal experiences, personal encounters, observations from long distances, prejudices and bias that all too often never go deep enough into the issues at the root of the phenomenon. There are those who are quick to point out the need for personal responsibility, in order to avoid being 'blamed' or in an effort to search for a way to avoid addressing these problems with public policy that transgresses their ideology. Even those who believe that government intervention alone will solve the problem, dismiss the fact that systemic factors that make life enjoyable for some, can make it possible to exploit the hopes and dreams of others.

Or have we already forgotten September 2008?