GSDC

Starting in the late 1990s, SWOP and GSDC began sounding the alarm over predatory lending practices and the dishonest use of subprime loan products in neighborhoods like Chicago Lawn. Together, we organized a campaign attacking lenders and brokers who preyed on senior citizens. Brokers would, for example, lure seniors into adjustable rate mortgages - the now infamous ARMS - without disclosing the mortgages' ballooning rates. Seniors using home equity to cover the costs of retirement were being duped into mortgages they could not afford.

Predatory lending among seniors was only the beginning, however. The subprime loan products would proliferate. Subprime loans - loans to clients who would not have qualified for typical bank mortgages - seemingly opened the door to homeownership for many families, many of them immigrant or low-income. In reality, the families could neither afford the loans in the first place nor refinance them later into better terms. Families and individuals in debt sought to use home equity to payoff that debt using subprime loans; many times, these families were preyed upon by opportunistic, unchecked brokers offering deals too good to be true.

As the situation worsened, our advocacy efforts never relented. SWOP and GSDC's original campaign included working with state legislators and conducting outreach to local residents aimed at raising awareness of bad lending practices. The campaign highlighted the importance and necessity of homeownership education and counseling and led us, in 2001, to inviting NHS to the southwest side to increase our collective capacity to counsel buyers and owners and to intervene with lenders on their behalf.

Our work has garnered the support of elected officials like current presidential candidate Barack Obama (an Illinois State Senator when we worked with him), Speaker of the Illinois State House Michael Madigan, Illinois Gov. Rod Blagojevich, and former Gov. George Ryan. Putting predatory lending in the spotlight, we fought for the passage of two anti-predatory lending laws. Most recently, in 2005 - with Speaker Madigan - we helped pass pilot state legislation that required qualifying borrowers to attend counseling in an effort to make sure they understood the loans they were getting.

In 2006, GSDC stepped up its counseling efforts by opening the Southwest REACH Center (6155 S. Pulaski Rd.). The REACH Center offered more housing & financial counseling along with employment counseling and public benefits screening. The center's latter two additional services gave greater depth to our counseling and outreach ability.

With the official launch of the Keep Our Homes Campaign in October, GSDC, NHS, and SWOP have committed even more resources to advocate for our neighborhoods and to work with our residents. This commitment comes at a time when our neighborhoods need it most.

The numbers are stark: between 2005 and 2007, foreclosure filings in Chicago rose 85%; in southwest Chicago's Gage Park, the first half of 2008 saw an 82.3% increase in foreclosures over the first half of 2007. Over that same period, the Archer Heights neighborhood saw a whopping 230% increase. The 60629 zip code, which includes Chicago Lawn and West Lawn, saw 810 foreclosures initiated in the first six months of 2008.

Moreover, between 2005 and 2007, the Woodstock Institute, a Chicago-based housing research organization, reports that in Illinois, dramatically more foreclosed homes are going to auction and becoming real estate owned properties (REOs). REOs are foreclosed properties lenders essentially own after they are unable to sell them at auction. A rise in REOs translates into more and more vacant, boarded-up houses blighting neighborhoods.

The effect all of this is having on our neighborhoods is devastating. "We have three foreclosures within one block [of my house]," says Livia Villarreal, the director of the REACH Center and an 18-year Chicago Lawn resident. "We never had a boarded-up home. We do now. It's terrible…People worry about people breaking into the house…" Boarded-up, vacant and neglected houses become sites of crime and eyesores. They depress land values and can set back a community's gains in quality of life.

Our response to this threat has been to ramp up and expand our advocacy and outreach efforts. Thanks to a major grant from the John D. and Catherine T. MacArthur Foundation, our coalition has been able to expand many of the services it was already providing to southwest side residents in the context of a new concerted community organizing effort.

The key to keeping people in their homes is reaching them before foreclosure, and SWOP is leading our effort to connect with more troubled local homeowners to bring them into housing counseling as soon as possible. GSDC and NHS have hired new counselors (which you can meet here) already working with clients worried about foreclosure or in foreclosure.

For those already in default or foreclosure, all is not lost. Foreclosures in Illinois can take over a year to complete, starting from the first missed payment. In that span of time, our counselors can intervene in myriad ways, from developing a financial plan for clients to negotiating with lenders to modify bad mortgages.

More, and more successful, counseling is not the only component of the Keep Our Homes Campaign. The larger goal of the campaign is to mobilize our entire community to find a broad solution to this crisis. As SWOP connects homeowners with counseling, it is also gauging the community-wide impact of the crisis and engaging concerned local residents in finding a larger solution. In this outreach, we are seeking not only residents in, or worried about being in, foreclosure but any resident worried about the impact of mass foreclosures on their community.

Our outreach began en masse on Sunday, June 15, at SWOP member institution St. Nicholas of Tolentine. Father Stan Rataj dedicated his homily to the current crisis and captured the spirit of our campaign.

"If several hundred families lost their homes to a fire or tornado, we would rush to help them," he said. "This tragedy is just as serious, yet people feel that they have to face it by themselves. Hundreds of people losing their homes because they were lied to is simply not acceptable. We will face this crisis together, as we have so many others through the years."

After each mass, SWOP conducted a survey of parishioners to gauge the impact the crisis is having on families in the neighborhood. This research action was the first in a series to be carried out at other local churches.

What will a solution to this crisis look like? How do we deal with the already foreclosed and vacant homes? How can we put greater pressure on lenders to refinance thousands of bad mortgages? How will changes in the national and global economic scene affect our community's efforts? As in the past, our southwest side community has to work together to hash out a solution and answer the questions above; possible avenues for a solution include public actions, legislative work with elected officials, and development of foreclosure aversion funds. The launch of the Keep Our Homes Campaign has been a major step towards organizing a community solution, but much work still lies ahead.

Thanks to SWOP, NHS, and Crain's Chicago Business for contributing reporting.

If you have any questions about the Keep Our Homes campaign or want to get involved - perhaps you or someone you know is in need of assistance, or perhaps you want to contribute to the overall solution - please call our campaign hotline toll free at 1-877-846-6800.