Resurrection Project, Self-Help Federal Credit Union Acquire Loans to Prevent Foreclosures

Courtesy of The Resurrection Project

Lawndale News Chicago's Bilingual Newspaper - BusinessSelf-Help Federal Credit Union (Self-Help) and The Resurrection Project (TRP) were successful in acquiring 1,100 loans totaling $141 million of face value from the Federal Deposit Insurance Corporation (FDIC). These loans are part of the former Second Federal Savings and Loan (Second Federal) portfolio that the FDIC retained as a result of taking Second Federal into receivership during this past summer.

Self-Help and TRP partnered in this venture to ensure Second Federal’s mortgage portfolio would not be auctioned to predatory lenders and prospectors, which likely would have led to more foreclosures in Southwest side Chicago neighborhoods.

The communities served by the former Second Federal have been hit hard by the economic recession. Foreclosures and boarded-up houses have increased in these Southwest side communities of Chicago, which include Back of Yards, Brighton Park, Little Village, and Cicero. The acquisition of Second Federal’s portfolio by TRP and Self-Help was an important first step in preserving home ownership throughout these communities.

According to the Center for Responsible Lending, communities of color are bearing the largest share of lost value with a drain of $1 trillion in home equity from minority neighborhoods. This represents a huge setback for homeowners of color who had previously made economic progress.

In addition to the acquisition of the loans, Self-Help and TRP plan to set up a local community development credit union to provide sorely needed financial products at reasonable rates and drive out payday lenders and other predatory lenders from the local communities.

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