Tuesday, December 18, 2012

Emergence of Exploitative Contract Selling, Part 1: An Introduction

If buying a house on contract was inherently disadvantageous to prospective home buyers, why was this method of home purchase so prevalent in North Lawndale in the 1950s and 60s?

It wasn’t merely a matter of choice for the buyers.  For the vast majority of African Americans looking to buy a home in Chicago in the 1950s and 60s, obtaining a home mortgage was next to impossible.  There were a multitude of contributing factors to this - federal housing policies, real estate board codes of ethics, restrictive covenants, the availability of credit, the availability of housing, individual acts of and institutional racism; the accumulative effect of which was a void of home purchasing options otherwise available to whites.  Contract selling emerged to fill that void for African Americans seeking the American Dream, but its roots meant that it was ripe for exploitation.

The relationship between the real estate industry, the banking industry,and federal departments such as the FHA was heavily interdependent at best, and conspiratorial at worst.  The practices and prevailing attitudes of the real estate industry manifested themselves at the neighborhood level in the adoption of racially restrictive covenants.  Those same attitudes that held that African Americans moving in would reduce the value of a neighborhood informed the creation of the “residential security maps”, which in turn drove the underwriting policies of the FHA.  And without FHA backing, local banks were even less inclined to make mortgages available.   

In the coming weeks, we will explore in further detail Restrictive Covenants and Real Estate Boards, the Federal Housing Administration, and the Fair Housing Act of 1968 and the Community Reinvestment Act of 1977 and their effects on the housing market.


Emergence of Exploitative Contract Selling, Part 2: Restrictive Covenants and Real Estate Boards

Emergence of Exploitative Contract Selling, Part 3: The Federal Housing Administration

Emergence of Exploitative Contract Selling, Part 4: The Fair Housing Act of 1968 and the Community Reinvestment Act of 1977

2 comments:

  1. Police said residential security cameras show two males exist a light colored 4-door sedan. The passenger crawls under the car to cut off the converter, while the driver exits the car to stand watch.

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  2. it was informative. thanks for sharing.
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