This report from ABC News focuses on Neighborhood Housing Services of Chicago, a nonprofit and part of a growing list of organizations that embrace the identity of “ethical lender,” working with low-income borrowers amid an unnerving financial crisis.
What’s so ethical about them? Simple: long-term, fixed rate loans, fundamental economic responsibility, crafting a mortgage that allows the borrower to live within his or her means. Basic, sound common sense.
According to the ABC report, Neighborhood Housing Services has lent more than $2 million in the past few years, with financing coming from private investors and banks. The organization has reported a mind-boggling 98 percent on-time pay rate from its borrowers.
The ethical lending movement, according to the article, began with a group of nuns who invested a portion of their retirement savings to provide loans to the working poor.
From the article:
Sister Corinne Florek, fund coordinator for the Mercy Partnership Fund, which has invested in several nonprofit housing developers, says she has witnessed the success of ethical lending. “When I invest in you, we are now in a relationship with each other, because I’m asking you to pay that back, so now your good and my good are linked,” Florek said.
Nuns forgoing retirement funds to help low-income homeowners to keep foreclosure at bay is a great lead, but it hardly ends there. Check out Opportunity Finance Network, a network of private financial intermediaries identifying and investing in opportunities to benefit low-income and low-wealth people in the U.S.
The Network, according to their Web site, in addition to offering counseling and refinancing options, “originated more than $19.8 billion in financing in non-conforming urban, rural, and Native communities through 2007. This has generated or maintained 191,381 jobs; 43,050 businesses and microenterprises; 577,736 housing units; and, 9,552 community facility projects.”