Consumer Action hosts webinar on housing insecurity in America

By Linda Williams

Housing insecurity is an umbrella term that encompasses several dimensions of housing problems consumers may experience, including unaffordability, inadequate safety and quality, and housing loss. Housing insecurity doesn’t mean that a household is homeless or on the cusp of homelessness; the term is more expansive, encompassing people who are behind on their rent or mortgage payments or who have low confidence in their ability to make their housing payments.

Eviction and foreclosure can impact consumers far beyond the immediate loss of a home, pushing them into poverty and homelessness, disrupting education and employment, impacting credit, hindering their future ability to obtain decent housing, and spurring a host of health problems.

As pandemic-specific protections lapsed, leaving consumers with overdue housing payments and looming foreclosures and evictions, Consumer Action hosted a webinar on Nov. 17 to bring attention to the huge number of households that are housing insecure due to the economic fallout from the pandemic.

Michela Zonta, a senior policy analyst for the Center for American Progress, joined Tara Roche, a policy analyst for The Pew Charitable Trusts; Sarah Bolling Mancini, staff attorney for the National Consumer Law Center; Carl Windom, financial counselor and financial coach serving as a Freddie Mac consultant; and Sarah Saadian, senior vice president of public policy at the National Low Income Housing Coalition to shed light on housing insecurity in America post-COVID-19 and to discuss solutions to the affordable housing crisis.

Zonta provided an overview of the history of housing insecurity. She outlined some past reasons, such as rapid population growth due to immigration, inadequate new housing construction, and persistent discrimination and racial segregation.

Low-cost manufactured homes are among the lower-cost housing options, but the industry is not without risk for consumers. Tara Roche discussed the challenges buyers face when purchasing manufactured homes—such as the lack of small mortgage availability, alternative financing challenges, and contract and land ownership issues. Roche explained that it is hard to obtain a mortgage loan for $150,000 or less from mainstream lenders, so consumers are turning to alternative, often predatory, financing to purchase homes.

Sarah Bolling Mancini has assisted consumers who purchased homes using predatory alternative financing to obtain some relief. She explained that clear ownership is one of the main differences between a traditional purchase money mortgage and a “contract for deed” transaction, which typically involves the seller holding on to the property deed until all installment payments are made in full. By contrast, In a purchase money mortgage, the buyer is provided with a mortgage and deed at closing.

Carl Windom told the audience that homeowners who are not in foreclosure and who have good credit might want to consider refinancing their homes to manage debt, get out of an alternative financing arrangement, reduce their interest rate, and boost their financial wellness. Home equity can be a significant contributor to overall wealth creation, especially for people without the means to invest in other assets, he said. Windom provided an overview of the refinance process that included factors consumers should consider to determine if refinancing is suitable for their financial situations.

When asked if there is help on the way for the millions of consumers who need housing relief, Sarah Saadian pointed to the Build Back Better Act. If passed, it will invest $150 billion in affordable housing. This historic housing investment would include $25 billion to expand rental assistance; $65 billion to preserve public housing for more than 2 million residents; and $15 billion through the national Housing Trust Fund to build or preserve 150,000 homes for people with the greatest need.

When the story of the pandemic is finally written, it will tell how a health crisis created a business crisis, and then a job crisis, and, ultimately, a housing crisis.

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