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Housing recovery? Not for all

The Case-Shiller housing price index notched another solid gain last week, but Ramon Suero didn’t catch the news. While economists were trumpeting data showing housing prices shooting up across the country, Suero was in Boston Housing Court, fighting off a government-owned mortgage company’s efforts to throw his family into the street.

The housing market may be rebounding nicely in many corners of the country, but Uphams Corner in Dorchester is not one of them. Suero bought the condominium he’s fighting to hold on to in 2005, for $283,000. Today, the home is worth less than one-third that sum. Suero is far from unique in that respect. Across Massachusetts, wealthy towns are as wealthy as ever, while those cities hit hardest by the housing crash have found recovery to be illusory. If housing is bouncing back, it’s doing so in an unstable, highly unequal manner. Housing’s recovery is comforting the comfortable, and leaving the marginalized behind.


Suero arrived in Dorchester from the Dominican Republic in 2002. He came, he says, looking for the American Dream. He found part of the dream organizing for the hospitality workers union. And he bought a piece of it in 2005, in the form of the ground floor of a triple-decker.

Suero’s mortgage file reads like a tour of the worst abuses of the housing boom. He bought his condo with a no-money-down mortgage from Option One, a notorious subprime lender. Option One allegedly targeted non-native English speakers and poor communities of color with high-risk loans. The lender gave Suero a mortgage with a low, interest-only teaser rate; this mortgage was designed to blow up after two years, when the teaser rate expired and the loan’s interest rate shot up.

Investors enthusiastically handed out these exploding mortgages because they would force borrowers to refinance, theoretically allowing lenders and Wall Street banks to collect multiple sets of mortgage fees from the same customers; in reality, exploding interest rates and falling home prices forced the wave of subprime mortgage defaults that brought down the economy. Suero managed to get out from under his Option One mortgage. His new loan would end up in the hands of Freddie Mac; a year later, the mortgage giant collapsed and was nationalized.


Suero first fell behind on his mortgage, he and his union say, because his labor organizing cost him his job. When he got back on his feet, his mother-in-law fell ill, and his wife missed months of work while tending to her back in the Dominican. The couple asked Freddie Mac for a loan modification. The government-owned company declined, and instead took their home.

Foreclosures wracked Dorchester because predatory lenders like Option One flooded the neighborhood with toxic credit. The predatory loans inflated housing prices on the market’s upward swing, and decimated communities on the way down. The story is the same in places like Brockton, Fall River, New Bedford, Lawrence, and Lynn. These communities felt the housing crash far more deeply than the average Massachusetts town, and now the housing recovery is leaving them behind.

Data from the Warren Group shows that, while places like Cambridge, Arlington, Newton, and Hingham are enjoying housing values that are either at or just below their all-time highs, prices in Dorchester remain one-third lower than their 2005 peak. Last year, new foreclosure petitions shot up in Dorchester, Brockton, and Fall River.

Suero’s condominium isn’t worth much, on paper, to anyone. The two other units in his building sold last year for $80,000 each. But the condo is worth something to Suero, his wife, teenage son, and two young daughters. So the family has refused to leave the home Freddie Mac foreclosed on more than two years ago. “We’re fighting for everybody around Dorchester,” Suero said after court last week. “If we move, the bank will just continue to throw families out.”


Suero has been making rent payments on the property. He lined up a buyer, Boston Community Capital, to take the unit off Freddie Mac’s hands, at a price above its $80,000 market value. So far, Freddie has refused, because it won’t work with firms, like Boston Community Capital, that sell foreclosed properties back to their former owners. Freddie would take Boston Community Capital’s cash offer from anyone but a lender connected to Suero, but that buyer doesn’t exist. Not five years after the housing crash, not in Uphams Corner.

Paul McMorrow is an associate editor at CommonWealth Magazine. His column appears regularly in the Globe.