Breaking Silence


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Breaking Silence

  1. 1. 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
  2. 2. The Facts <ul><li>Homeownership as an Asset for Wealth </li></ul><ul><li>Housing wealth was and remains the largest single source of savings, exceeding other assets such as pensions and personal savings </li></ul><ul><li>For African Americans and Hispanic homeowners, home equity represented more than 80% of net worth </li></ul>
  3. 3. The Facts <ul><li>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 </li></ul>
  4. 4. Baltimore – The Facts <ul><li>64% of its residents are African Americans and only 11% of the City’s residents are middle class ($35,000 to $75,000) </li></ul><ul><li>59% of the City’s households are African American </li></ul><ul><li>1% of African Americans and 5% of whites earn more than $75,000 </li></ul><ul><li>2000 Census data </li></ul>
  5. 5. Baltimore – The Facts <ul><li>50% of African Americans “owned” their own homes; </li></ul><ul><li>66% of African American middle class residents own their home and 73% of middle class whites own their home; </li></ul><ul><li>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 </li></ul><ul><li>2000 Census </li></ul>
  6. 6. Housing Facts - National <ul><li>2 million sub prime mortgages were estimated to go into foreclosure – between 1 st quarter of 2007 and 4 th quarter of 2009 </li></ul><ul><li>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 </li></ul><ul><li>US Joint Economic Committee </li></ul>
  7. 7. National – The Sub prime Loans <ul><li>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) </li></ul><ul><li>Nationally, African American home purchasers were 2.7 more likely to have a higher cost loan than white borrowers. </li></ul>
  8. 8. Maryland – Mortgage Foreclosures <ul><li>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 </li></ul><ul><li>Same period, growth rate in the prime ARM foreclosure inventory was 211.1% - almost double the national rate. </li></ul>
  9. 9. Baltimore - Foreclosures <ul><li>Baltimore City, Baltimore County, Montgomery County and Prince Georges County have consistently had the highest concentration of foreclosures in the State; </li></ul><ul><li>In Baltimore City, neighborhoods that are predominately African American have the highest rate of foreclosure; </li></ul><ul><li>What does that say about the loss of wealth and assets for Baltimore and specifically for African Americans? </li></ul>
  10. 10. Baltimore - Foreclosures <ul><li>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; </li></ul><ul><li>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. </li></ul>
  11. 11. Deeper in Baltimore <ul><li>Higher percentage African American areas tend to have a lower percentage of fixed rate loans and higher percentage of adjustable rate loans; </li></ul><ul><li>Higher percentage African American areas tend to have a higher percentage of sub prime loans; both ARM and fixed rate; and </li></ul><ul><li>Higher percentage African American areas have higher rates of non-current loans </li></ul>
  12. 12. Deeper in Baltimore <ul><li>EZ assisted homeownership loans, less than 1% foreclosure rate; whereas </li></ul><ul><li>28 zip codes within the Zone have significant sub prime loans and these are significantly African American communities; </li></ul><ul><li>Expanding into at one additional community based upon data on foreclosures and neighborhood preference based on market research </li></ul>
  13. 13. The costs of foreclosures <ul><li>What is the cost of foreclosure for communities? </li></ul><ul><li>What is the cost of foreclosures for individual wealth for African Americans and Latinos when homeownership accounts for 80% of their net worth </li></ul><ul><li>What is the cost of foreclosure to children’s well being? </li></ul><ul><li>Children of AA middle class are the first generation – Are not likely to become middle class – a further lost of wealth (Pew Charitable Trust) </li></ul>
  14. 14. How do people access reliable information <ul><li>Access points for reliable and accurate information for citizens? </li></ul><ul><li>Social networks </li></ul><ul><li>What is the likely scope of social networks for whites vs. blacks of the same income? </li></ul><ul><li>What are the likely social networks for African Americans in a city/communities that are racially segregated, racially and income polarized? </li></ul>
  15. 15. So what is the value of social networks in preventing foreclosure <ul><li>Social networks – the connections between people and between people and institutions (a set of relationships) </li></ul><ul><li>Why – it provides valuable access to resources and information (economic, social, physical and spiritual) </li></ul><ul><li>Social capital – the sum total of interactions within social networks resulting in trust </li></ul><ul><li>Healthy/high functioning social networks result in reliability of information and productive relationships toward mutual goals </li></ul>
  16. 16. Use the social capital 4 community organizing and strong marketing tools <ul><li>Use community based groups to design marketing material </li></ul><ul><li>Use existing housing/financial literacy champions for their input as well </li></ul><ul><li>Target the outreach to EVERYONE and major community institutions </li></ul><ul><li>Door to door – EVERY door – including vacant </li></ul><ul><li>Drive the house occupant to existing organizations for reliable information and assistance </li></ul><ul><li>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 </li></ul><ul><li>BREAKING THE SILENCE OF SHAME </li></ul>
  17. 17. Connecting to Accurate Information <ul><li>Using the basics of community organizing </li></ul><ul><li>Using existing resources of housing counselors </li></ul><ul><li>Using existing resources of financial literacy/financial management experts </li></ul><ul><li>Get accurate information, tools and answer questions before its too late </li></ul><ul><li>BREAKING THE SILENCE OF SHAME </li></ul>
  18. 18. Limitations of the model <ul><li>Depends upon the capacity of community based organizations </li></ul><ul><li>Depends upon those organizations having skill set and staff to organize and mobilize in a community </li></ul><ul><li>In this economic downturn, these very same non profits, community based, are likely to experience financial challenges inhibiting their operation </li></ul>