Blogging the 2008 Assets Learning Conference

Yes, the excellent team at CFED has invited me to bring my laptop and my insatiable thirst for news, practices and innovations in asset development.  I’m going to blog the Assets Learning Conference, September 11-13, in Washington DC.

This event happens every other year, assembling some 1,200 leaders in the asset development field all across the country, and I hope to meet every last one of them, or at least meet more than the dozen or so fellow practitioners I’ve met thus far through the Midas collaborative in Massachusetts.

Stay tuned for more about what looks most interesting at the conference, and make your reservations if you haven’t already.  See you there.

This American Life: The Housing Crisis

If your twenty-something mortgage broker is hanging out with b-list celebrities and buying thousand dollar bottles of Cristal between deals, don’t sign the contract.

I learned this and other entertaining tips from the recent This American Life episode on the housing crisis, which delves into the story behind the economic mess we find ourselves in now, and finally it starts to make sense.

Leave it to TAL to turn subprime mortgages and collateralized debt obligations into riveting radio.

Individual Development Accounts and Foreclosure

Those of us promoting home ownership for low-income families inevitably get push-back when the housing market collapses and foreclosures climb. Aren’t we contributing to the problem, people wonder.

Which is why I was pleased to see an announcement from Bob Friedman, Founder of CFED (Corporation for Enterprise Development) about the results of a survey they conducted in February 2008 to gather foreclosure statistics and related feedback concerning low-income families who had become first-time home buyers using individual development accounts.

Friedman noted two key findings from their survey:

There was only one reported foreclosure among all 650 IDA-backed low-income new homeowners, nor were there any reported delinquencies.

Of the 422 recipients with available loan term data, 412 (98%) received fixed-rate mortgages.

This affirmation comes as no surprise — that “innovative” debt products can’t take the place of savings and financial education for low income home buyers. But I love it that CFED gathered the data to back up what common sense tells us. The data allows us to more confidently echo and spread Friedman’s powerful conclusion: “Above all, we should not let the excesses, fraud, lack of underwriting standards, weakness of credit risk, the sloppiness of credit markets and the greed of predatory lenders be blamed on working families struggling to realize their American dreams.” Amen.

Asset Development Commission

Today I attended the quarterly meeting of the Midas collaborative — a partnership of Massachusetts nonprofit agencies all engaged in asset development work (running individual development account programs, in particular).

As a relative newbie at this work, I find the meetings very helpful, with tremendous expertise around the table. I’m clearly the oddball, employed by an arts center, serving low-income artists in the remote northwest corner of the state. But the other members don’t make me feel like a freak: one of the veterans made a point to say that she has worked with a number of artists and artisans making investments in their artistic businesses, and they have often been among the most “successful” graduates of the program. That was nice to hear.

One agenda item was a report on the state’s Asset Development Commission, an advisory group formed by the legislature to “study and make recommendations concerning the development of financial assets as a way to ensure that all people in the state of Massachusetts achieve long-term, sustainable economic security and self-sufficiency and enjoy economic opportunity.“

It has taken a couple of years for this Commission to really get off the ground, but now it’s in high gear, engaging some heavy-hitters including legislative leaders, executive branch staff, other policy makers, practitioners, and (they hope) low-income residents. In addition to their schedule of meetings, the Commission will host three public hearings during the next six months, and they have established three working groups that are intended to include members outside of the Commission itself so as to broaden the conversation. Apparently, any interested person may join a working group, and even participate in meetings by conference call if trips to Boston aren’t feasible.

That may not sound like most people’s idea of a good time, but I think I’ll join one of the working groups to really see how this process unfolds.

Asset Development Links

A couple of things I read recently that I’ve been meaning to pass along:

1. A few weeks ago the Freakonomics blog on The New York Times website featured a video piece on the culture and economics of check-cashing services, utilized widely by the poor. It’s worth a look, especially if you’re not familiar with check-cashing businesses. On a related note, I’ve also read some interesting discussions about “stored value cards” as an emerging alternative to check-cashing services, which is still very much in an experimental phase when it comes to meeting the financial needs of the unbanked poor, but stored value cards certainly hold exciting possibilities.

2. Today’s New York Times column by David Brooks argues for major public-sector and private-sector policy shifts in our country’s financial values and practices. This sentiment is expressed by policy makers on a regular basis, so I’m not surprised to hear a Times columnist echo the refrain, but the column did bring to my attention a new non-partisan think tank report, “For a New Thrift, Confronting the Debt Culture.” I don’t expect that it contains any truly revolutionary ideas, so I intend to be my thrifty self and not pay the $7.00 for the report (but I’m happy to look at it if they want to give a public service blogger a free copy, hint, hint). What did I think of the Brooks column? Well, this particular national challenge tends to elicit a lot of moralizing (as Brooks demonstrates), which is not generally my style, but I have to agree that there seems to be a crisis of values at work here in addition to the economic and political factors driving Americans further into debt. Perhaps we need more leaders tackling our crisis of indebtedness and overconsumption within a values framework while others tackle it within an economic and political framework. We obviously don’t all share the same values framework, but neither do we all share the same economic and political frameworks, so I don’t feel uncomfortable seeing the discussion take place on that level too. The reality of the problem needs to sink in across all levels of our society if major change is going to occur.