Those of us promoting home ownership for low-income families inevitably get push-back when the housing market collapses and foreclosures climb. Aren’t we contributing to the problem, people wonder.
Which is why I was pleased to see an announcement from Bob Friedman, Founder of CFED (Corporation for Enterprise Development) about the results of a survey they conducted in February 2008 to gather foreclosure statistics and related feedback concerning low-income families who had become first-time home buyers using individual development accounts.
Friedman noted two key findings from their survey:
There was only one reported foreclosure among all 650 IDA-backed low-income new homeowners, nor were there any reported delinquencies.
Of the 422 recipients with available loan term data, 412 (98%) received fixed-rate mortgages.
This affirmation comes as no surprise — that “innovative” debt products can’t take the place of savings and financial education for low income home buyers. But I love it that CFED gathered the data to back up what common sense tells us. The data allows us to more confidently echo and spread Friedman’s powerful conclusion: “Above all, we should not let the excesses, fraud, lack of underwriting standards, weakness of credit risk, the sloppiness of credit markets and the greed of predatory lenders be blamed on working families struggling to realize their American dreams.” Amen.