Ownership & Assets

New Paper: Building Assets Through Free Tax Prep

November 22, 2013
Publication Image For millions of struggling American families, filing taxes has become associated with more than just a pile of annoying paperwork. Tax time represents a significant opportunity to build financial security through income supports like the Earned Income Tax Credit (EITC). Across the country, service-group coalitions coordinate volunteers at Volunteer Income Tax Assistance, or VITA, sites dedicated to making sure that those struggling families get the most out of the tax time moment.

Ohio’s Tax Time Coalition

  • By
  • David Rothstein,
  • New America Foundation
November 22, 2013
Throughout the country, a network of over 4,300 Volunteer Income Tax Assistance (VITA) sites helps over 1.2 million low-income taxpayers file their taxes for free each year. Organized through IRS grants, the sites not only help low-income Americans file their taxes, but also to take advantage of important tax credits like the Earned Income Tax Credit (EITC). For more than six years, the Ohio Tax Time Coalition (formerly the Franklin County EITC Coalition) has served the Columbus metro area as one of these sites.

Supporting Savings Should be the Rule - Not the Exception

November 21, 2013
Publication Image On Tuesday, we featured a great guest post from Ben Landy of The Century Foundation about how asset limits in public assistance programs create a “poverty trap,” and prevent low-income families from making financial decisions in their best interest. The piece centered around the story of James Brady, a homeless New Jersey man who lost his public assistance after finding $850, which he turned over to the police despite his own financial need. When the money went unclaimed, Brady got it back – but lost his health insurance in the process.

How to Make the American Dream More than Just a Dream

November 14, 2013
Publication Image Last week, Pew released a report (Moving On Up: Why Do Some Americans Leave the Bottom of the Economic Ladder, but Not Others?) examining the failure of the “American Dream.” Americans like to think that economic mobility can be achieved through hard work and perseverance, but the report’s findings repudiate this ideal. Seventy percent of those in the lowest income quintile never escape the bottom rungs of the ladder.

Consumer Financial Protection Bureau Will Now Accept Complaints about Payday Loans

November 7, 2013
Publication Image According to a recent press release, the Consumer Financial Protection Bureau (CFPB) is now accepting complaints from borrowers who experience problems using payday loans. Payday loans are often marketed as an easy solution to a short-term cash flow problem, but can easily ensare consumers in a damaging cycle of debt as fees and interest accrue.

Settlement Resolves Latest Allegation of Racially Discriminatory Lending

November 6, 2013
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The U.S. Department of Housing and Urban Development (HUD) put out a press release yesterday detailing a settlement they've reached with a mortgage lender, called MortgageIT, Inc. The release and attached Conciliation Agreement depict a consistent trend of race-based discrimination woven throughout the mortgage loan process.

From the release:

A HUD review of MortgageIT’s 2007 and 2008 internal loan data alleged that African American and Hispanic borrowers paid APRs [Annual Percentage Rates] that were eight to ten basis points higher, on average than similarly-situated white borrowers. In addition, HUD alleged that African American borrowers were 65 percent and Hispanic borrowers 72 percent more likely to receive higher priced loans than similarly-situated white borrowers, African American and Hispanic borrowers also allegedly paid, on average, $707 and $906 more in fees, respectively. HUD also alleged that African-American applicants were 45 percent more likely to be denied a mortgage loan than similarly-situated white borrowers.  Hispanic applicants were allegedly 35 percent more likely to be denied.

To summarize, black and Latino borrowers, who were in roughly equivalent financial situations, were allegedly charged more up front in fees than white borrowers, given less favorable loan terms, and sometimes denied a loan altogether. The agreement notes that in 9 percent of cases with a black borrower and 15 percent of cases with a Latino/Hispanic borrower, the borrower paid $5000 or more in excess fees (that is, above that which a similarly-situated white person would have paid). The settlement does not fully quantify the magnitude of economic impact these practices had. For example, did borrowers denied a loan based on their race go on to successfully get loans elsewhere? What impact did paying an extra $700 to $5000 in fees have on a family's long-term financial stability?

Celebrating Success in the Family Self-Sufficiency Program

October 31, 2013
This year marks the 20th anniversary of the Family Self-Sufficiency Program at the Housing Opportunities Commission (HOC) in Montgomery County, Maryland. The Family Self-Sufficiency program is a Department of Housing and Urban Development (HUD) program designed to support public housing residents and Housing Choice Voucher holders with employment and savings goals. In honor of this important milestone, HOC has produced an engaging 15-minute video describing their program, participants, and the successes they've had over the past two decades. They've seen 800 of their participants work their way through the program and graduate (out of over a thousand enrollees). The video features interviews with program coordinators, case managers, volunteers, and participants themselves, all talking about the positive impact this program has in the lives of families receiving rental assistance.

One FSS program participant featured in the video describes her experience in the program (which supported her on the path to homeownership): "Being able to purchase my own home… you know, that’s a great lineage to leave to my children. Having their own home gives them roots and foundation to say, 'Hey, this is where I grew up – with a sense of stability, knowing that if things don’t work out there, I always have a place to come back to to call home.' So those are the things that I’ve learned in FSS that I can pass along to my children.”

The FSS program is one the Asset Building Program has supported for years - it's a unique model that couples participation in rental assistance programs with support for employment, holistic case management services, and an opportunity to build up a pool of assets. Over the past year, I've been working to gather information from FSS program coordinators in communities across the U.S. and looking at the research on how this program works. We're in the process of finalizing a comprehensive report on these findings that we're looking forward to releasing soon.

Half in Ten Campaign Releases Annual Report on Poverty Indicators

October 30, 2013
Publication Image The Half in Ten Campaign yesterday released its annual poverty indicator report for 2013. This is the third report since the Campaign “started the clock” toward the goal of cutting poverty in half between 2011 and 2020. Essentially based on three measures (the official poverty rate, the supplemental poverty measure, and income inequality), the Campaign’s annual reports provide a useful pulse check each year to assess the nation’s progress with regard to Americans’ economic situation. This year, Half in Ten’s metrics reveal a bleak picture of a stagnating economy and little progress toward cutting poverty in half by the beginning of the next decade.

Asset Building News Week, October 21-25

October 25, 2013
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The Asset Building News Week is a weekly Friday feature on The Ladder, the Asset Building Program blog, designed to help readers keep up with news and developments in the asset building field. This week's topics include public assistance, asset limits, poverty, the achievement gap, and homelessness.

Young Adults Experienced Financial Side Effects from the Great Recession

October 24, 2013
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Mounting debt, diminishing net worth, insufficient savings, increasing foreclosures, rising unemployment—all painful financial side effects of what has been dubbed the worst economic recession in almost a century. These side effects have been relatively well-documented. Rates of bankruptcy rose 74% and home foreclosures soared as much as 358% in some areas. Unemployment rates peaked at a national average of about 10%, with much higher rates documented for African Americans and Latinos. High rates of unemployment meant potentially fewer wages for day-to-day household needs. With only small amounts of savings or net worth to tide them over, millions of households turned to public assistance programs to sustain themselves. These effects are likely to follow households—and the children who grew up in these households during the Great Recession—for years to come.

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