Acorn
Association of Community Organizers for Reform Now and the Housing Crisis
A McCain ad says that ACORN in Chicago engaged in “bullying banks, intimidation tactics, disruption of business and forced banks to issue risky home loans.”
According to a fact check by Jess Henig, with Ronald Lampard, it’s true that ACORN has led demonstrations on a number of issues nationwide, which have include predatory lending, immigration reform, neighborhood violence, utilities shut-offs, minimum wage increases. Sometimes the group’s tactics are confrontational, veering into civil disobedience. For instance, in the late 1980s, ACORN activists in a number of cities, including Chicago, seized abandoned houses and encouraged squatting by homeless people, in an attempt to force local governments to salvage abandoned properties and convert them into low-income housing. The targets of ACORN’s protests sometimes describe the activists as intractable or even aggressive. Other ACORN protests are less confrontational, and in 2006 McCain spoke at an ACORN rally on illegal immigration.
It’s inaccurate to say that ACORN forced banks to make risky loans, although it has certainly applied pressure on banks to make loans to minority and low-income borrowers. Furthermore, ACORN worked directly with banks in a joint effort to increase such lending. In Chicago these efforts date back at least to 1992, after a report by the Federal Reserve Bank of Boston showed that minorities in that city were two to three times as likely to be denied mortgage loans as white applicants, and that high-income minorities were more likely to be turned down than low-income whites. Chicago ACORN then started a mortgage assistance program, in cooperation with five local banks, to help minority and low-income borrowers get mortgage loans.
The mortgages that ACORN worked out with the banks did have lower underwriting standards than were customary. They allowed a higher percentage of a family’s income to go to debt repayment, and counted rent and utility payments, not just credit card payments, as evidence of ability to pay back a loan. The loans were also more forgiving of past credit problems, as long as the recipient was making a proven effort to address them. But ACORN provided loan deals only to people who went through counseling on budget and credit issues. In 1992, First Nationwide Bank Vice President Neal Halleran told the Chicago Tribune: “Transaction by transaction, (loans from the ACORN program) would appear to be performing no worse than our portfolio overall.” According to the Tribune, First Nationwide had contacted ACORN to initiate the lending program.
A McCain ad says that ACORN in Chicago engaged in “bullying banks, intimidation tactics, disruption of business and forced banks to issue risky home loans.”
According to a fact check by Jess Henig, with Ronald Lampard, it’s true that ACORN has led demonstrations on a number of issues nationwide, which have include predatory lending, immigration reform, neighborhood violence, utilities shut-offs, minimum wage increases. Sometimes the group’s tactics are confrontational, veering into civil disobedience. For instance, in the late 1980s, ACORN activists in a number of cities, including Chicago, seized abandoned houses and encouraged squatting by homeless people, in an attempt to force local governments to salvage abandoned properties and convert them into low-income housing. The targets of ACORN’s protests sometimes describe the activists as intractable or even aggressive. Other ACORN protests are less confrontational, and in 2006 McCain spoke at an ACORN rally on illegal immigration.
It’s inaccurate to say that ACORN forced banks to make risky loans, although it has certainly applied pressure on banks to make loans to minority and low-income borrowers. Furthermore, ACORN worked directly with banks in a joint effort to increase such lending. In Chicago these efforts date back at least to 1992, after a report by the Federal Reserve Bank of Boston showed that minorities in that city were two to three times as likely to be denied mortgage loans as white applicants, and that high-income minorities were more likely to be turned down than low-income whites. Chicago ACORN then started a mortgage assistance program, in cooperation with five local banks, to help minority and low-income borrowers get mortgage loans.
The mortgages that ACORN worked out with the banks did have lower underwriting standards than were customary. They allowed a higher percentage of a family’s income to go to debt repayment, and counted rent and utility payments, not just credit card payments, as evidence of ability to pay back a loan. The loans were also more forgiving of past credit problems, as long as the recipient was making a proven effort to address them. But ACORN provided loan deals only to people who went through counseling on budget and credit issues. In 1992, First Nationwide Bank Vice President Neal Halleran told the Chicago Tribune: “Transaction by transaction, (loans from the ACORN program) would appear to be performing no worse than our portfolio overall.” According to the Tribune, First Nationwide had contacted ACORN to initiate the lending program.
posted by Jim O'Leary | 12:00 AM
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