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Disturbing News - With a Silver Lining

by Mike McGarry

November 06, 2008

Your reporter was shocked to read, in the Hartford Community Loan Fund newsletter, that homeownership in the minority community – that the city has been encouraging for fifteen years – is in deep trouble. The point made in the article was that minorities in Hartford pay higher rates for mortgages than Caucasians. Also, that this city, 80% minority, is the 5th worst in the nation with racial disparities in high cost lending.

This is not the fault of westenders, who it looks like shopped better (for mortgages) but the insidious salesmanship of the loose money floating around the last ten or so years. Everybody, white, black, Hispanic, asian … wants money for things (houses, cars, vacations), they really can’t afford – and sooner or later the bill needs to be paid. Get sick, lose a job, or a spouse, and the whole house of cards comes tumbling down.

Foreclosures in Hartford have jumped fourfold over the last year and with layoffs coming – even in government, once the employer of last resort – additional properties may end up with the banks. We all know that banks are terrible landlords and/or property managers. Back in the late ‘80’s and early 90’s, hundreds of abandoned buildings were testimony to the situation we may find in a year or two.

However, out of all this is a silver lining for some. Soon, maybe right now, money is available to buy these properties from the banks at huge – 30%, 40%, 50% - discounts.

Banks do not want these properties. We have many organizations in the city devoted to homeownership and even some that encourage investors (especially local ones). In addition, the City of Hartford may soon have some federal cash to help out.

The afore mentioned Hartford community load fund is one source, they can be reached at 296-7005 or www.hartfordloans.org. Rex Fowler is, by now, an old Hartford hand who can make a difference if he finds the right people to work with.

Your author looks on all this with a heavy heart. Back in the mid-90’s, it was our philosophy (the Peters-G.O.P Administration) that homeownership was a bit of a cure-all. That line has been followed by the Perez mayoral years, but the current mess has certainly clouded the picture. The intervention of the state, the feds, outfits like the loan fund may soften the blows but no program or bailout can solve the problem of people getting in over their heads financially.