For the last 25 years, ACORN Housing Corporation, a spinoff from the main group, had been an important advocate for low-income homeowners. It ran mortgage borrower counseling services out of 33 offices from coast to coast, and homeowners benefited from the group's affiliation with ACORN, which successfully fought predatory lenders like Ameriquest when federal regulators refused to.
Then Congress cut ACORN off – illegally, judges have since found. Gone were $17.2 million in federal foreclosure counseling and legal assistance grants for ACORN Housing. Until then, it had been one of the biggest homeowner counseling agencies in the nation, serving nearly 22,000 borrowers last year, most of them minorities with modest incomes.
To keep the work going, ACORN Housing has rebranded itself. (Many other ACORN-affiliated organizations around the country are doing much the same.) This month, Affordable Housing Centers of America opened its headquarters – in the same Chicago offices ACORN Housing occupied for years, and the same management.
"We're hopeful," says Affordable Housing Centers of America's Director of Policy, Bruce Dorpalen, who was with ACORN Housing since its founding in 1985. "We've made a number of changes in the organization, the courts have ruled that the blanket funding ban is unconstitutional, and we're very eager to get back into the funding stream."
Affordable Housing Centers has a lot of catching up to do. It had to shutter half of the old ACORN Housing offices and suspend specialized programs, like one that conducted emergency negotiations with lenders on behalf of borrowers who were days away from losing their homes. While the group made sure to keep serving existing ACORN Housing clients, new callers to its foreclosure hotline were out of luck.
In addition to getting back to helping borrowers avoid foreclosure, Affordable Housing Centers is taking on a new challenge that's actually not so new. With lenders now extremely conservative about evaluating mortgage applicants, just as they were back in 1985, many perfectly credit-worthy borrowers are finding they're rejected because they don't fit into narrow underwriting guidelines. So Affordable Housing Centers is starting to work with lenders to make sure that borrowers who might, say, depend on boarders to help make mortgage payments, or have no credit record because they've been living with parents until now, don't get excluded.
For years, ACORN Housing ran programs with lenders that successfully helped such borrowers, by carefully evaluating their incomes, debts and assets, and making sure they could pay. Thanks to the lending industry meltdown, Affordable Housing Centers of America now has to start all over again.
"Our experience is you can have conventional loans that are well underwritten but recognize what the real household budget is, what the real assets are," says Dorpalen.
"That's our real signature work."