In our current recession, one of the most lamentable phenomena is the widespread increase in home foreclosures. In the economic upswing of the 1990s and early 2000s, home loans were issued at ridiculously low interest rates.
Earlier in the decade, things looked bright as homeownership soared and builders raked in growing profits. At the core of the boom, however, were hundreds of thousands of borrowers who were convinced to buy properties they could not afford. When these bad debts finally caught up with banks, the unhealthy arrangement eventually culminated in a mortgage crisis.
Renters were affected by the crisis, too; landlords who bought properties expecting their values to soar found themselves selling houses and apartment buildings to banks after they failed to make their loan payments. Though the tenants of these properties could still pay their rent, sometimes banks told them they had to leave. Banks also told defaulting homeowners they had to be evicted before the due legal process of foreclosure ran its course.
In the future, even when the economy inevitably rebounds, groups like No One Leaves must continue laboring door-to-door to prevent this cycle of misinformation from repeating itself. If banks are unwilling to change their practices, pro bono groups like these must continue fulfilling a role that protects those who are most vulnerable to economic crises.
Borrowers in Boston who do not understand the complexities of the banking system are left in an even more precarious position with the recent failure of smaller banks and the worry created by general economic uncertainty. If it takes an outstanding citizen effort to inform these people of their rights, then the government has failed to stand up for the citizens it represents.
Even the government cannot be trusted to guarantee every citizen a fair loan and honest treatment from banks should they face foreclosure. It was, after all, the aggressive attitude of government-chartered lenders Fannie Mae and Freddie Mac that allowed many homeowners to sink themselves into debt by buying houses they could not afford.
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