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Breaking Silence

Breaking Silence






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    Breaking Silence Breaking Silence Presentation Transcript

    • Breaking the Silence of Shame Stopping the leakage of wealth – using social network/social capital to move people to action especially in African American communities Associated Black Charities
    • The Facts
      • Homeownership as an Asset for Wealth
      • Housing wealth was and remains the largest single source of savings, exceeding other assets such as pensions and personal savings
      • For African Americans and Hispanic homeowners, home equity represented more than 80% of net worth
    • The Facts
      • If 80% of net worth for African Americans and Hispanics is based on home equity, what does this say for a community, a neighborhood, a city or region where the majority of their population is African American and/or Hispanic in terms loss of wealth given the current economic downturn related to real estate
    • Baltimore – The Facts
      • 64% of its residents are African Americans and only 11% of the City’s residents are middle class ($35,000 to $75,000)
      • 59% of the City’s households are African American
      • 1% of African Americans and 5% of whites earn more than $75,000
      • 2000 Census data
    • Baltimore – The Facts
      • 50% of African Americans “owned” their own homes;
      • 66% of African American middle class residents own their home and 73% of middle class whites own their home;
      • The median value of a home owned by African American is $63,700 and the average value of a home owned by white residents is $78,300
      • 2000 Census
    • Housing Facts - National
      • 2 million sub prime mortgages were estimated to go into foreclosure – between 1 st quarter of 2007 and 4 th quarter of 2009
      • 4 th quarter of 2008, Realty Trac reported a total of 736,061 property foreclosure filings including default, notices of foreclosure sales and lender purchases of foreclosed properties
      • US Joint Economic Committee
    • National – The Sub prime Loans
      • A national ACORN report documented the racial disparities associated with the sub prime loan markets regardless of the income of the borrower (new homeowner or refinancing)
      • Nationally, African American home purchasers were 2.7 more likely to have a higher cost loan than white borrowers.
    • Maryland – Mortgage Foreclosures
      • Between the 4 th quarter of 2006 and the 3 rd quarter of 2007, the growth in Maryland’s prime and sub prime foreclosure inventories was more than double the national average
      • Same period, growth rate in the prime ARM foreclosure inventory was 211.1% - almost double the national rate.
    • Baltimore - Foreclosures
      • Baltimore City, Baltimore County, Montgomery County and Prince Georges County have consistently had the highest concentration of foreclosures in the State;
      • In Baltimore City, neighborhoods that are predominately African American have the highest rate of foreclosure;
      • What does that say about the loss of wealth and assets for Baltimore and specifically for African Americans?
    • Baltimore - Foreclosures
      • For 2007, compared to the distribution of owner-occupied housing units, there is a disproportionately large share of foreclosure filings in predominately African American neighborhoods;
      • With approximately 4.5% of the state’s taxable real property in Baltimore, residents will lose approximately $122 million in property related wealth based on Congress’ Joint Economic Committee.
    • Deeper in Baltimore
      • Higher percentage African American areas tend to have a lower percentage of fixed rate loans and higher percentage of adjustable rate loans;
      • Higher percentage African American areas tend to have a higher percentage of sub prime loans; both ARM and fixed rate; and
      • Higher percentage African American areas have higher rates of non-current loans
    • Deeper in Baltimore
      • EZ assisted homeownership loans, less than 1% foreclosure rate; whereas
      • 28 zip codes within the Zone have significant sub prime loans and these are significantly African American communities;
      • Expanding into at one additional community based upon data on foreclosures and neighborhood preference based on market research
    • The costs of foreclosures
      • What is the cost of foreclosure for communities?
      • What is the cost of foreclosures for individual wealth for African Americans and Latinos when homeownership accounts for 80% of their net worth
      • What is the cost of foreclosure to children’s well being?
      • Children of AA middle class are the first generation – Are not likely to become middle class – a further lost of wealth (Pew Charitable Trust)
    • How do people access reliable information
      • Access points for reliable and accurate information for citizens?
      • Social networks
      • What is the likely scope of social networks for whites vs. blacks of the same income?
      • What are the likely social networks for African Americans in a city/communities that are racially segregated, racially and income polarized?
    • So what is the value of social networks in preventing foreclosure
      • Social networks – the connections between people and between people and institutions (a set of relationships)
      • Why – it provides valuable access to resources and information (economic, social, physical and spiritual)
      • Social capital – the sum total of interactions within social networks resulting in trust
      • Healthy/high functioning social networks result in reliability of information and productive relationships toward mutual goals
    • Use the social capital 4 community organizing and strong marketing tools
      • Use community based groups to design marketing material
      • Use existing housing/financial literacy champions for their input as well
      • Target the outreach to EVERYONE and major community institutions
      • Door to door – EVERY door – including vacant
      • Drive the house occupant to existing organizations for reliable information and assistance
      • Value of privacy – not having to admit “I” didn’t manage this well; I made a mistake, I do not understand, I care what other people will think of me, I FAILED, I am stupid
    • Connecting to Accurate Information
      • Using the basics of community organizing
      • Using existing resources of housing counselors
      • Using existing resources of financial literacy/financial management experts
      • Get accurate information, tools and answer questions before its too late
    • Limitations of the model
      • Depends upon the capacity of community based organizations
      • Depends upon those organizations having skill set and staff to organize and mobilize in a community
      • In this economic downturn, these very same non profits, community based, are likely to experience financial challenges inhibiting their operation