About 2 1/2 years ago, Benji and I were getting married. We were also at a time, place and mood in our life when planting seeds and growing roots in a community we cared about was a priority. We hoped to start a family and we liked Oakland.
We could not afford to live in the Bay View/Hunter’s Point or Pleasanton, where he and I grew up. So we bought a modest Oakland home: a 1912 bungalow, 2 bedrooms/1 bath, small but cute backyard, okay neighborhood on the edge of not as safe ones. We knew the price of our home might fluctuate at times, but we told ourselves we were in it for the long haul and assumed the two of us would always work full-time. We got a fixed-rate loan, stretched ourselves a bit, but were hopeful.
What we didn’t anticipate was that our house would lose over 25% of its value before our second year and that mamahood would change me so much. I no longer wanted to rush back to work after 2 months of maternity leave and it just didn’t feel right to me or him to leave little Soluna full-time. Without two full-time workers in the family, money has become very, very tight. And now like many fairly new homeowners (or refinancers) across the country, we are following the housing crisis and Obama’s economic policies with many questions on our minds and critical family financial decisions on the horizon:
Is it actually a more financially sound decision to foreclose? Will we regret not doing so in 3 years or 5 years? How long will it actually take for our loan to be ”above water?” Will loan companies even consider talking to us about negotiating our loan?
What gets forgotten in all this housing crisis buzz is that many of the folks asking these questions or don’t even have the luxury of asking these questions and have already been uprooted are families of color, immigrant families and low-income families. (Even my parents are considering walking away from their home of almost 20 years.) Some facts:
- The Federal Reserve released a study in 2007 that found 52.8 percent of African-Americans got a high-cost home loan when they refinanced in 2006, compared to 37.7 percent of Latinos and just 25.7 percent of whites in the same year.*
- One Fanie Mae study found that 50 percent of all borrowers qualified for a cheaper loan than the one they eventually got. They even discovered that female buyers tend to get higher-cost loans than male counterparts.*
- United for a Fair Economy also estimates that the total loss of wealth for people of color will be between $164 billion and $213 billion for subprime loans taken during the past eight years, the greatest loss of wealth for people of color in modern US history.*
What it comes down to is that people of color, immigrants, and poor people were targeted and taken advantage of… exploited for their pursuit of their “American Dream.” Our communities and families are going to continue to feel the effects as we lose our homes and neighborhoods transform. Homes throughout Oakland are sitting vacant, businesses are closing and it feels like crime is on the rise. Will the Stimulus Package and Foreclosure Relief help our communities and families re-build so that our children can grow in communities and homes they deserve? Maybe. Will City of Oakland leaders and politicians find creative solutions to keep families in Oakland and in their homes? I really doubt it. So what now?
Soluna’s homecoming (Christmas Day 2007):
I hear you. The economic crisis is hitting most of us in all kinds of ways. Unfortunately, I think that owning a home is another capitalist, American myth that many of us fall for. To be honest, I had that urge too when I got married and it seemed all possible with both of us making decent money. But we decided to continue living our minimalist ways and chose to stay in our rent-controlled home, save money, etc. Thank GOD for that b/c I eventually ended up w/no job but we’re still able to squeeze by. I feel ya, Andrea! Big ups to you and Ben for making the hard decision to not send Soluna to full-time daycare – I know that takes lots of sacrifice. I also feel for the parents who really do not even have the choice to not work full-time. Lastly, I think Soluna will be happy wherever, as long as she’s with mama & papi, esp. if you two are less stressed out.
“owning a home is another capitalist, American myth that many of us fall for”
that’s kind of a overly general and judgmental statement, don’t you think?
i’m sure there are homeowners who live a minimalistic lifestyle. Maybe that’s their value, or maybe it’s so that they can pay the mortgage, and property tax, and HOA’s as an investment for themselves and for their future (myself being one of them).
What I wrote is not a general or judgmental statement but a factual one. This country was built on capitalism which is rooted in private ownership, including property. Private ownership is fundamental to this society’s brand of capitalism and part if it is sold to us in a myth that says it is a sound investment to purchase a home and the right thing to do as soon as possible, especially if you’re starting a family. You only need to read the news to figure out that this myth has been painfully debunked lately. Folks purchased homes to pursue this American myth and many are now out on the street b/c of foreclosures. Privatization and deregulation of all kinds of industries occured in the last few decades so that free market capitalism can expand exponentially and recklessly; that is why there is a global financial crisis now. Your position seems quite defensive but there’s nothing I wrote that shoud offend homeowners – all kinds of people buy homes for various reasons. This doesn’t mean that the myth exists and that the best of us fall for it or buy a home for other reasons. In these economic times, it is prudent for us re-examine the economic system that we live under and the pitfalls that are happening all around us. I feel for the families with homes that are feeling insecure right now or second guessing their decision – or even worse – for the ones that lost their homes and lack other options.