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Housing Studies

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Ethnically bounded homeownership: qualitativeinsights on Los Angeles immigrant homeowners’experiences during the U.S. Great Recession

Deirdre Pfeiffer, Karna Wong, Paul Ong & Melany De La Cruz-Viesca

To cite this article: Deirdre Pfeiffer, Karna Wong, Paul Ong & Melany De La Cruz-Viesca(2016): Ethnically bounded homeownership: qualitative insights on Los Angeles immigranthomeowners’ experiences during the U.S. Great Recession, Housing Studies, DOI:10.1080/02673037.2016.1208159

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HOUSING STUDIES, 2016http://dx.doi.org/10.1080/02673037.2016.1208159

Ethnically bounded homeownership: qualitative insights on Los Angeles immigrant homeowners’ experiences during the U.S. Great Recession

Deirdre Pfeiffera, Karna Wongb, Paul Ongc and Melany De La Cruz-Viescad

aSchool of Geographical Sciences and Urban Planning, Arizona State University, Phoenix, AZ, USA; bDepartment of Urban Planning, University of California Los Angeles, Los Angeles, CA, USA; cDepartments of Urban Planning, Social Welfare, and Asian American Studies, University of California Los Angeles, Los Angeles, CA, USA; dAsian American Studies Center, University of California Los Angeles, Los Angeles, CA, USA

ABSTRACTImmigrant homeowners’ function within ethnic boundaries in the housing market may have helped or hindered them during the recent U.S. Great Recession. This research explores this theme through interviews with immigrant and non-immigrant homeowners from four ethnic communities in Los Angeles County and the non-profit organizations that tried to assist them. Immigrant homeowners turned to co-ethnics for advice and support and formed multigenerational households as a strategy to achieve and sustain homeownership. Language and cultural barriers primed them for risky loans and thwarted their pursuit of refinance and modification when they struggled to make mortgage payments. These findings conform to existing evidence of ethnic segmentation in the housing market and imply that analyses of home buying and homeownership in areas with significant immigrant populations should factor in the role of ethnicity.

Introduction

This research contributes new qualitative insights into the impact of foreclosures on immi-grants. Much of the scholarship on homeowners’ experience of the United States foreclo-sure crisis has focused on disproportionate impacts in communities of color, particularly African-American communities (e.g. Anacker et al., 2012; Lichtenstein & Weber, 2013). Less is known about immigrants’ susceptibility to foreclosure relative to the native born. Foreclosure rates were higher in the early stages of the crisis in places with larger immigrant population proportions, such as Las Vegas, Phoenix, and Miami (Kochhar et al., 2009). Yet, declines in homeownership rates for immigrants during the recession were smaller than for other groups; in small regions, immigrant homeownership rates increased (Painter & Yu, 2014). Differences in immigrants’ length of residence, homeownership rates, home equity,

KEYWORDSImmigrants; foreclosures; ethnic communities; housing counselors; non-profits

ARTICLE HISTORYReceived 13 May 2015 Accepted 1 June 2016

© 2016 Informa UK Limited, trading as Taylor & Francis Group

CONTACT Deirdre Pfeiffer [email protected]

2 D. PFEIFFER ET AL.

and refinancing behaviors at the start of the crisis may partly explain this variation (Allen, 2011; Cahill & Franklin, 2013; Painter & Yu, 2014).

This research study builds on evidence of foreclosure rates by nativity status by qualita-tively exploring immigrants’ and non-immigrants’ experiences sustaining homeownership during the recent recession. We focus on potential differences arising from the opportunities and liabilities of shared ethnicity among immigrants. Immigrants function within social and spatial ethnic boundaries because of having common languages, cultural norms and expectations, social networks, and barriers to accessing non-ethnic services and resources. Immigrant homeowners’ function within these boundaries in entering and navigating the housing market may have exposed them to particular risks and led them to use different strategies when they struggled to make mortgages payments (Cahill & Franklin, 2013; Cortes et al., 2007; DeVerteuil, 2011; Johnston et al., 1997; McCormack & Mazar, 2015; Ratner, 1996; Zonta, 2012).

This research considers this hypothesis of within ethnic interactions and dynamics through in-depth interviews with twelve homeowners in four ethnically distinct commu-nities in Los Angeles and thirteen housing counselors and community-based organizations (CBOs) that assist troubled homeowners. We compare the experiences of immigrant and non-immigrant homeowners during the recent housing boom and bust to explore the role of ethnic boundaries as a causal mechanism in immigrant homeowners’ outcomes.

The article proceeds as follows. First, we address the opportunities and liabilities of shared ethnicity for immigrant homeowners. Then, we introduce our study site and detail the research methodology. The bulk of the article reviews themes that emerged during our interviews and considers their fit with existing theory on the immigrant experience of homeownership. We conclude by summarizing lessons learned and directions for future research and remedial policy-making.

Ethnically bounded homeownership

A rich literature explores how immigrants’ social networks and spaces enable and constrain their socioeconomic mobility and well-being. Studies on ethnic enclave economies show that ethnic boundaries have economic benefits and costs for immigrants (e.g. Bates, 1994; Falcon, 1995; Ong, 1984; Sanders & Nee, 1987; Wilson & Portes, 1980). Ethnic boundaries may facilitate job searches and lower interaction costs among workers and with employers. However, they may limit socioeconomic mobility by slowing immigrants’ acculturation into mainstream employment, earnings, and other economic gains. More recent studies use a “resurgent ethnicity” framework to examine immigrants’ outcomes in more advan-taged ethnic communities – places that have formed for reasons other than economic constraints (Logan et al., 2002; Walton, 2012, 2015; Wen et al., 2009). This research finds that ethnic communities may have socioeconomic benefits for immigrants, such as better health (Walton, 2015).

Ethnic boundaries may lead immigrants to be in some ways more resilient but in other ways more vulnerable in the housing market during economic downturns (Cahill & Franklin, 2013; Cortes et al., 2007; DeVerteuil 2011; Johnston et al., 1997; Lee, 2014; McCormack & Mazar, 2015; Patraporn et al., 2010; Ratner, 1996; Zonta, 2012). Ethnic boundaries may offer immigrants a social safety net, helping them find shelter and avoid destitution (DeVerteuil, 2011). Immigrants’ social networks and spaces may enable them

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to tap into reserves of ethnic social, human, and financial capital to avoid and weather economic shocks. Yet, ethnic boundaries may impose a glass ceiling on immigrants and limit their socioeconomic mobility (DeVerteuil, 2011). Reliance on co-ethnics for social, financial, and other support may limit immigrants’ access to mainstream or non-ethnic real estate and lending institutions, and (at worst) expose them to predatory practices. However, access to mainstream institutions is not a panacea. Immigrants’ racial and socioeconomic identities transcend their ethnic boundaries and may expose them to discrimination outside of their ethnic communities (DeVerteuil, 2011).

Language and cultural boundaries

Immigrants’ language and cultural boundaries may lead them to experience special chal-lenges in the housing market. Eight-five per cent of U.S. immigrants speak a primary lan-guage other than English in the home; 60% of this group speaks English less than very well (U.S. Census, 2015). Immigrants’ limited English ability may have impeded their com-prehension of loan documents and made them more vulnerable to predatory lending and foreclosure, especially those speaking uncommon languages and dialects (Cortes et al., 2007; McCormack & Mazar, 2015; National CAPACD, 2011; Phetchareun, 2012; Ratner, 1996). Language difficulties also may have restricted immigrants’ options for help when they had trouble making payments (National CAPACD, 2011). Organizations assisting immigrants may have had challenges navigating government bureaucracies because of language trans-lation and other additional services that they require (National CAPACD, 2011).

Immigrants originating from countries with diverse institutional lending structures may have different home buying and lending practices than the native born. These immigrants may be unfamiliar with U.S. lending processes and distrust mainstream banking and gov-ernment institutions (Cortes et al., 2007; Johnston et al., 1997; McCormack & Mazar, 2015; National CAPACD, 2011; Ratner, 1996). Those from countries lacking a formal banking system, such as Cambodia, or having an unstable or corrupt banking system, such as Mexico, may have an aversion to being in debt (Freddie Mac, 2005). Debt-adverse immigrants may put more money down when they buy a home (Johnston et al., 1997) and accumulate equity quicker. They may feel more shame when having difficulty making payments and be less likely to seek help.

Household boundaries

Immigrants initially may overcrowd into households to protect against homelessness and prejudice (DeVerteuil, 2011). About one in six households headed by an immigrant was multigenerational (had two or more related adult generations under one roof) in 2009 com-pared to about one in ten households headed by a non-immigrant (Kochhar & Cohn, 2011).

A multigenerational living arrangement can strengthen or weaken a household’s finances. As a way to pool resources, the multigenerational household may be a critical piece of infra-structure in the social safety net in immigrant communities (DeVerteuil, 2011). More adults living in the home means more potential workers to pay bills, including the mortgage, and protection against poverty (Kochhar & Cohn, 2011). However, fulfilling a social responsi-bility to house co-ethnics may deplete immigrants’ resources. The greater the number of people living in the household, the larger the house needed, the bigger the mortgage, and


the increased potential financial strain on the household. Finances may diminish when adults in the household are not working, ill, or require special services (Saegert et al., 2009). Remittance obligations also may reduce resources in multigenerational households and frustrate their ability to build and maintain wealth over time (McCormack & Mazar, 2015).

Reliance on co-ethnic networks

Immigrant homeowners’ language, cultural, and household boundaries may lead them to rely more on nearby co-ethnic social and institutional networks (such as immigrant-serving non-profits) than mainstream institutions for information about lending, securing funds to purchase a home, and troubleshooting missed mortgage payments (Cortes et al., 2007; DeVerteuil, 2011; Johnston et al., 1997; Patraporn et al., 2010; Phetchareun, 2012; Ratner, 1996).

Family members or other co-ethnics are valuable because they can help translate in deal-ings with the lender (Phetchareun, 2012). Immigrants often may turn first to co-ethnic social networks rather than housing counselors and other mainstream social support organizations when they are at risk of undergoing foreclosure (Lee, 2014; National CAPACD, 2011). Yet, reliance on co-ethnic real estate and lending professionals could make immigrants more vulnerable to scams and misinformation about refinancing and modification. A rich litera-ture on class divides within ethnic communities helps explain these experiences (e.g. Hyra, 2006; Pattillo, 2007). More affluent and politically connected ethnic residents may serve as liaisons or ethnic brokers between the ethnic community and the mainstream, non-ethnic establishment. These exchanges are at times broadly beneficial to the ethnic community; at other times, only the ethnic brokers and non-ethnic establishment interests benefit. The dynamics of brokering fragments ethnic communities and notions of a unified agenda within these communities (Pattillo, 2007).

Transcending ethnic boundaries

Poor immigrants of color seeking help from mainstream institutions may disproportion-ately experience risky and predatory lending and poor customer service support, like other minority and low-income borrowers. This segment of immigrant homeowners may be on balance at higher risk of economic distress, regardless of how they function within their ethnic boundaries. Mortgage lending discrimination was rampant against low-income and minority people and communities during the 1990s and 2000s (Immergluck, 2009). African-Americans’ and Latinos’ disproportionate receipt of subprime and other risky loans (e.g. originated as interest only or with no down payment or income verification and adjustable rates) during the mid-2000s housing boom is well documented (e.g. Bocian et al., 2010b; Immergluck, 2009). Differences in mortgage lending by race in both periods are not entirely accounted for by variation in income, education, loan amounts, or housing and neighbor-hood characteristics among these groups; the race of the borrower seems related to the terms of the loan received (Faber, 2013; Immergluck, 2009).

This section has detailed diverse expectations for how immigrant homeowners’ social and spatial ethnic boundaries may have led them to have experiences distinct from non- immigrant homeowners during the recent foreclosure crisis. Yet, immigrant and non- immigrant homeowners who are of color and low income may have also shared experiences.

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Further understanding how social and spatial ethnic boundaries distinctly shape the expe-riences of immigrant compared to non-immigrant homeowners, particularly among those who are of color and low income, is an issue worthy of investigation.

Study site

Los Angeles County, California, which is a majority–minority region, immigrant desti-nation, and site of the foreclosure crisis, is an appropriate setting to explore pathways to homeownership and foreclosure in diverse communities. Home prices rose faster than income during the mid-2000s, which led to high homeowner housing burdens or the per cent of income spent on housing costs. By 2005, half of mortgage loans originated in the county had risky terms, such as subprime interest rates (three or more percentage points above prime) and a second lien (Ong et al., 2013). Rising unemployment, declining incomes, and resetting mortgage interest rates kept housing burdens high during the recession. Steep declines in median home sale prices stymied refinancing. About 30 000 to 35 000 households lost their homes annually from 2009 to 2012 – a sharp increase from about 15 000 to 20 000 annually from 1999 to 2007 (Ong et al., 2013).

The Los Angeles recession story is multiracial and multiethnic (see Table 1). About half of the population is Latino, followed by non-Hispanic white (28 per cent), Asian American (14 per cent), and African-American (8 per cent). Over one-third of the population is for-eign born. Seventy-per cent of Asian Americans and 40 per cent of Latinos are foreign born compared to 18 per cent of whites and 7 per cent of African-Americans (U.S. Census, 2015).

Lending, foreclosure and unemployment rates, housing burdens, and home value declines varied by racial and ethnic groups in Los Angeles during the recession. From 2005 to 2007, over half of loans originated to African-Americans and Latinos were subprime compared to only 27 and 20 per cent of those originated to Asians and whites, respectively (Ong et al., 2013). The incidence of receiving a second loan and high loan-to-value ratio (4 to 1 or greater) followed similar patterns (Ong et al., 2013). African-Americans and Latinos, in turn, experienced greater foreclosure and unemployment rates and home value declines and higher housing burdens than other groups (Bocian et al., 2010a; U.S. Census, 2015). Although Asian Americans experienced lower foreclosure and unemployment rates and home value declines than non-Hispanic whites, they were more likely to be housing bur-dened (U.S. Census, 2015). In turn, foreclosure rates experienced by some Asian American

Table 1. Key demographics.

Sources: U.S. Census, American Community Survey, 2010 5-Year Estimates and 2011 1-Year Estimates.

Downey Glendale Inglewood Monterey Park Rosemead LA CountyPeople 111 772 191 719 109 673 60 937 53 764 9 818 605Households 33 936 72 269 36 389 19 963 14 247 3 241 204% Owners 51 39 36 55 51 48Median Home Value $522 800 $635 100 $419 300 $495 600 $470 700 $508 800 Median Household Income $59 674 $54 677 $43 460 $52 159 $46 706 $55 476 % Foreign-born 36 55 28 54 57 36% Asian American 7 16 2 66 60 14% African American 3 1 43 0 0 8% Latino 71 17 51 27 34 48% Non-Hispanic white 18 62 3 5 5 28% Multigenerational householdwith 3+ Generations 10 5 9 9 15 8


ethnic groups, such as Filipinos, Koreans, and Cambodians, approached those experienced by African-Americans and Latinos (Ong et al., 2013).

Los Angeles homeowners’ differing access to ethnic banks and other forms of transna-tional capital during this period may account for some of these disparities. Asian home-owners, for instance, were more likely to apply for loans from ethnic and large mainstream banks that offered better terms than Latinos and African-Americans during the housing boom (Zonta, 2012). Greater competition within the more diversified Asian lending market in Los Angeles also may have led Asian borrowers to receive more affordable and less risky loans (Zonta, 2012).

Data and methods

We used a qualitative method to expand on existing theory of how immigrants’ function within social and spatial ethnic boundaries may have uniquely shaped their experience of homeownership during the recent foreclosure crisis in Los Angeles County. This entailed conducting sequential, semi-structured interviews with ethnically diverse immigrant and non-immigrant homeowners and supportive community-based and housing counseling organizations until reaching a point of empirical saturation or repetition in reported expe-riences (Small, 2009; Yin, 2014). The strength of our method lies in its literal and theoretical replication of cases or homeowners’ experiences (Small, 2009; Yin, 2014). Comparing the experiences of diverse immigrant homeowners offers insight into whether ethnic bound-aries were a consistently or variably present mechanism affecting their outcomes during the recent housing boom and bust in Los Angeles County. Comparing the experiences of immigrant and non-immigrant homeowners illuminates whether ethnic boundaries played a distinct role in immigrants’ outcomes, as suggested by existing theory.

Four communities with varying racial/ethnic and foreign-born population proportions were selected as geographies from which to recruit respondents (see Figure 1 and Table 1). They included Glendale, Downey, Inglewood, and the east San Gabriel Valley cities of Rosemead and Monterey Park. Glendale’s population is majority white, with a large portion Armenian. Downey’s population is majority Latino, with a large minority white. Inglewood’s population is about half Latino and just under half African-American. Monterey Park and Rosemead’s populations are majority Asian American, with a large Latino population. The majority of people were immigrants in Glendale, Monterey Park, and Rosemead, and a large minority was foreign born in Downey and Inglewood (see Table 1). These places contain extensive ethnic social and institutional networks, which immigrants living inside and outside of the communities rely on for jobs, loans, and information.

Addresses of homeowners facing default between 2006 and 2012 from the four com-munities were acquired from the Los Angeles County Recorder. A U.S. Census Bureau surname data-set was used to identify homeowners’ likely ethnicity based on probabilities derived from reported ethnicity. We targeted likely Latino homeowners in Downey, Asian American homeowners in Monterey Park and Rosemead, African-American homeowners in Inglewood, and white homeowners in Glendale to capture a wide range of experiences. A total of 609 homeowners in the case study communities received a mail inviting them to participate in the research. Of the invitations sent, about 25 per cent were returned to sender. Twenty-five people expressed interest, of which twelve were interviewed.

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Participants were interviewed about their experiences buying a home and navigating default and foreclosure, among other issues. We did not ask participants if they were for-eign born, given the sensitivity of nativity status if someone is undocumented and at risk of deportation. Instead, we considered participants to come from an “immigrant experience” if they spoke a primary language other than English in the home, an approximation used in other research (Allen, 2011).

Basic information about the participants is listed below. We changed their names to protect their privacy. Half of the participants came from the immigrant experience. Four had homes in Downey, two had homes in Inglewood, two had homes in or near Glendale, and two had homes in the San Gabriel Valley. Two of the interviewees had homes outside of the study communities. Five of the interviewed homeowners identified as Latino, three identified as Asian American, and three identified as African-American. Only one person identified as white. All of the interviewees experienced difficulty making their mortgage payments and most underwent default. Two of the participants underwent foreclosure, with one selling their property in a short sale.

Homeowners from the Immigrant Experience:

(1) Boupha – a Southeast Asian American woman from South Los Angeles County(2) Chien – a Southeast and East Asian American man from the San Gabriel Valley(3) Luis – a Latino man from Downey(4) Nadifa – an African woman from Inglewood

Figure 1. Case study communities. Data source: Cencus 2010|shapefile: 2010 Tigerline. (Research assistant: Chhandara Pech).


(5) Paula – a Latina woman from the San Fernando Valley(6) Wen – a Chinese American woman from the San Gabriel Valley

Homeowners from the Non-Immigrant Experience:

(1) Carl – an African-American man from a city near Glendale(2) Guillermo – a Latino man from Downey(3) Marcelo – a Latino man from Downey(4) Teresa – a Latina woman from Downey(5) Tiffany – an African-American woman from Inglewood(6) Walt – a white man from Glendale

Los Angeles County CBOs and housing counseling agencies (HCAs) were recruited for interviews using the U.S. Department of Housing and Urban Development (HUD) list of HCAs and referrals from our networks. We contacted 26 CBOs and HCAs, of which thirteen were interviewed. Organizations were asked about their services offered, characteristics of their clientele, and factors driving their clients to default and foreclosure.

The interviewed organizations work with diverse geographic and ethnic communities. Targeted neighborhoods and cities included downtown, Koreatown, east Hollywood, and the northeast San Fernando Valley in the City of Los Angeles, Inglewood, various places in the San Gabriel Valley, East Los Angeles, and Long Beach. Four of the organizations worked in multiple states or nationally. Five of the organizations primarily targeted Asian Americans and focused on clients of Korean, Southeast Asian, and Filipino descent. Four focused on Latinos, and four had a diverse clientele, including African-Americans.

Almost all of the organizations provided financial education and foreclosure counseling. They typically had only one to three housing counselors on staff who worked part-time on other programs. Some of the larger organizations had between four and fifteen housing counselors.

Culturally and linguistically competent faculty and students conducted and audio- recorded the interviews over the phone or in-person in 2013. The content of the interviews was summarized, with illustrative quotes transcribed in full. The transcripts were coded using a deductive and inductive method to discern differences between homeowners from the immigrant and non-immigrant experience and organizations predominately and not predominately serving immigrants. We triangulated data among and between the home-owners and organizations in drawing conclusions. Members of an advisory board of Los Angeles immigrant-serving CBOs also commented on a draft version of the research.

The opportunities and liabilities of shared ethnicity for immigrant homeowners in Los Angeles County during the Great Recession

We explore how language, cultural, and household boundaries shaped immigrant homeown-ers’ experiences in Los Angeles County during the Great Recession in this section. We also address commonalities among homeowners from and not from the immigrant experience.

Language and cultural boundaries

Many of the interviewed organizations’ clients had language or cultural barriers to commu-nicating with their lenders and loan servicers. A lack of translation services at origination

HOUSING STUDIES 9

was a common issue. Banks’ practice of providing translated marketing materials but English-only loan documents was widespread and may have contributed to immigrants originating loans without understanding their risks. A counselor at a San Gabriel Valley HCA explained, “[The banks] make their advertisements very 6th grade material, right? Very easy to understand … But when you look at the contracts that they’re signing, it’s even hard for an attorney to understand that … you [were] pushed [to originate the loan] in Spanish or Chinese or Cantonese, and all the sudden now you’re signing a document that’s in English. That’s really hard for a client to understand … what they’re getting themselves into.”

Boupha’s parents’ limited English ability was a barrier to researching the diversity of loan products on the market and understanding the risks of the loan they received. They were disadvantaged because their lender did not speak their language, Khmer. Their loan documents were also in English. “They don’t know English that well,” she explained. “So they were practically clueless.”

Language and cultural competency barriers continued to disadvantage immigrants dur-ing the loan refinance and modification process. Language translation was not available for all groups through the 1-800-HOPE helpline, which was an early source of support for troubled homeowners. This was particularly the case for Asian Americans who speak less common languages and dialects (e.g. Laotian, Khmer, Thai, and/or Korean). The directors of an Asian American-focused HCA and Asian American CBO, which served many Korean immigrants, remembered that the helpline “was hopeless” for their limited English clients. Only about 20 per cent of the CBO’s clients contacted their loan servicer directly. Most clients “don’t know what to do and how to do [it]. They cannot communicate with them.”

CBOs and HCAs targeting specific immigrant ethnic groups play an important role in brokering between their clients and mainstream lenders, as well as providing culturally competent financial education. The most common strategy that they used was translating loan and other financial information into multiple languages. An Asian American advo-cacy organization advertised upcoming foreclosure fairs in Mandarin, Cantonese, Korean, and Tagalog. One multistate HCA had phone translation available in 160 languages, but a limitation was that some of the translators were not native language speakers.

The second most common strategy that the interviewed CBOs and HCAs used was to provide a more culturally customized, one-on-one foreclosure counseling experience. They recognized that attending large foreclosure fairs or housing counseling classes could be intimidating and embarrassing to troubled homeowners from some nationalities. For instance, a “very sensitive” cultural issue that an Asian American-focused HCA serving Southeast Asians encountered with clients was balancing religious donations with savings to make mortgage payments or qualify for a loan modification.

Providing linguistically and culturally competent services was time-intensive, which strained the interviewed organizations’ resources. A program director at an Asian American-focused HCA serving many Southeast Asian clients illustrated this by recalling a recent case: “One of our clients … is totally, totally monolingual. Her husband speaks English pretty fluently, but … [the loan servicer] wouldn’t speak with her husband because his name is not on the loan. So I actually helped them write a letter to submit to the bank saying that the wife authorizes her husband to speak on her behalf whenever the bank calls. But for some reason they … rejected that letter totally saying no, we are only going to use our interpreter. But then the interpreter that they hired is actually Laotian. Of course, they can speak Thai, but it is not like a native Thai speaker. They are not Thai. There [was] a lot of


miscommunication even with that interpreter, because she misinterpreted what my client was actually asking the agent from the bank.”

The liaison role that the program director plays in clients’ loan remediation was widely described by the interviewed organizations serving immigrants. Several of the organizations felt that funders were not sensitive enough to the challenges of serving a limited English-speaking population in allocating resources. HUD specifies a maximum dollar amount to assist a client for counseling or group education. Yet, it often cost the interviewed organi-zations more than HUD allows, especially with the back and forth translation services and clarifications necessary with a large limited English-speaking caseload. The director of an Asian American advocacy group observed that, as a result, many CBOs and HCAs that served these populations “had net losses.”

Household boundaries

Living in a multigenerational household was at once a financial strain and benefit for home-owners from the immigrant experience. The interviewed organizations mentioned that the departure of a working adult in a multigenerational household was a hardship for some of the immigrant families. A program director from an Asian American-focused HCA with many Southeast Asian clients described it as a “loss of income,” which can put a household at risk of mortgage default. For instance, when the daughter of one client moved out, they needed to find a renter to meet the mortgage payment. Counselors from a Los Angeles HCA with many Latino clients observed that adult workers moving out of multigenerational households was at the root of their clients’ troubles paying the mortgage.

Living in a multigenerational household was also a troubleshooting strategy that the interviewed homeowners used when they faced difficulty making mortgage payments. Chien’s parents, for instance, paid rent after they moved in with him, which helped him pay his mortgage. The interviewed organizations observed their immigrant clients doubling up within families. The clients of a nationwide affordable homeownership organization sometimes converted garages so that family members could live in them.

Homeowners from the non-immigrant experience also reported living in multigenera-tional households, but these were temporarily formed in response to the recession, which was distinct from the immigrant experience homeowners. Walt, a non-immigrant, had his nephew move in with him after he became unemployed in 2009. His nephew paid rent, which helped Walt make mortgage payments for a few more years. When foreclosure was imminent, however, Walt’s nephew moved out. In contrast, Luis, an immigrant experience homeowner, planned to keep his multigenerational household together in the near future. His monthly payments were much reduced after receiving a modification, and his home value had gone up. His next goal was to purchase a duplex so that his family could have more room but still live together.

Getting into trouble and troubleshooting through co-ethnic social networks

Immigrant homeowners’ language, cultural, and household boundaries elevated the role of their social networks in purchasing a home and troubleshooting missed payments. Obtaining advice and looking for loan products among co-ethnics was a common prac-tice. Some even experienced peer pressure from co-ethnics to become a homeowner. The

HOUSING STUDIES 11

interviewed organizations also mentioned tapping into ethnic networks as strategy that their immigrant clients used in entering and trying to sustain homeownership.

Co-ethnic realtors and lenders served as linguistic and cultural brokers with mainstream institutions. When Boupha’s parents considered buying a home, her mother’s friend, who was one of the only Southeast Asian real estate agents that they knew and felt they could trust, advised them on the lending process. Culturally and linguistically competent real estate agents, banks, and brokers may help limited English-speaking families navigate the complex home buying process. Yet, they also may gain families’ trust and mislead them. Several of the interviewed homeowners from the immigrant experience felt that they were misled by co-ethnic realtors and lenders. Luis took out a $50 000 home equity loan in 2004 to make home improvements and buy a cemetery plot and small home in his native Mexico. His co-ethnic lender used the home’s higher appraised value from 2002 and falsified his household income to secure those resources. Luis recalled, “They only said ‘We are going to report you have a greater income than what you really perceive, so that it speeds the process’ but they never took even three minutes to explain ‘Hey, but this and this can happen if we do report that.’” He later felt “trapped” by his much higher $2600 monthly loan payment.

The CBOs and HCAs interviewed described inter-ethnic scams, which were particu-larly rampant in immigrant communities. The representative of Asian American advocacy group recalled that subprime loans “were being promoted … in certain nationalities … communities [where] you had a certain kind of … network of real estate agents, mortgage lenders and brokers, people of that ethnicity that worked for some of the major banks and loan companies, the escrow firms.” The representative from an Asian American CBO with many Filipino clients also observed co-ethnic exploitation happening in the home buying process among his clients. According to a national HCA, more than 70 per cent of their clients over a seven- to eight-year period had experience with “Brown on Brown, Asian to Asian [risky or predatory lending].”

Immigrant homebuyers, as well as those of color, were also preyed on by people and insti-tutions from outside of their ethnic communities. Nadifa’s realtor (not a co-ethnic) chose their lender, who recommended making a miniscule down payment (less than 2 per cent). This lender just asked her and her husband to “sign here, sign there.” “We were vulnerable, and the real estate person took advantage of the situation,” she explained. Differences in language, culture, and legal status put immigrant homebuyers at higher risk of exploita-tion by mainstream lenders. A Los Angeles HCA serving a diverse group of clients and a San Fernando Valley HCA with many Latino clients observed that Latinos, particularly those that were undocumented immigrants, were persistently more vulnerable to predatory lending.

When having difficulty making payments, family and friends were a critical source of support for homeowners from the immigrant and non-immigrant experience alike. Yet, relying on family and friends for financial help was more common among homeowners from the immigrant experience. Wen, for instance, obtained a $20 000 loan from her sister to help pay the mortgage on her primary residence when her investment properties were at risk of foreclosure. The tendency for immigrants to look for financial help within their ethnic communities first was widely mentioned by the interviewed organizations. A representative of a national HCA observed Asian American and Latino families employed this strategy more than African-American or white households. A counselor at an Asian American-focused HCA said that her Southeast Asian clients “rely on financial support from either


their adult children, or their relatives, or even their parents.” The Korean clients of an Asian American CBO often asked their children or relatives to support them.

Just as immigrants were at times taken advantage of by co-ethnics in the process of originating a loan, so were they misled in the process of modifying it. Paying for help from attorney or other private entity was common among interviewed homeowners from the immigrant experience. The interviewed organizations widely believed that most of the private businesses and attorneys that their clients worked with to help refinance or modify their loans were scam artists because they required fees to be paid up front and had little accountability. Some of the attorneys and real estate professionals that immigrant home-owners contracted with were co-ethnics. A program director at an Asian American-focused HCA with many Southeast Asian clients lamented that a few of these questionable oper-ations were run by “prominent figures in our community.” The representative of an Asian American CBO with many Filipino clients admitted that scams run by co-ethnics in the community were “the worst part.” He explained, “We had Filipino real estate professionals who got these people in these horrible situations, sometimes fraudulently, sometimes using predatory practices. These are the same people who said, ‘Oh, we can help you now that you are in foreclosure’ … [they were] asking for money up front and all these other crazy scams.” Predatory companies routinely ran ads in ethnic media.

Luis, for instance, was scammed out of $3000 by a debt reduction company that he heard about on the radio. “I contacted one of those companies that claim to cut your debt by half,” he recalled. “There was a lot of paperwork involved, and everything was dealt by phone only. So they kept telling me to fill a certain form and take it to the bank, then fill some other forms and much paperwork … I don’t even think they have offices here, though, since everything was talked over the phone.” The stress of trying to refinance his mortgage mounted. “The phone would not stop ringing; the bank was calling my home, and at one point I was going to the doctor three or four times a week, that’s how bad it got.”

The lack of a credit system or social welfare programs in immigrants’ home countries and their distrust of non-ethnic institutions may have discouraged them from going to free HCAs and mainstream lending institutions for assistance. A director of an Asian American-focused HCA with many Korean clients explained, “In your home country, if you are down and under, there’s no one there to help you, maybe your immediate family members, but that’s it. It’s not like government programs that are going to come in. So for [immigrants] to come to America, they can’t even imagine that someone would care about them and would want to help them.” A sense of shame prevented immigrants from some nationalities from exposing their financial state. Language barriers also encouraged immigrants to seek out private (and sometimes predatory) loan refinance and modification services provided by co-ethnics. The director of an Asian American CBO serving the Korean community estimated that 40 per cent of their clients relied on private companies, including co-ethnic lawyers, largely because of difficulties communicating directly with mainstream institutions.

Transcending ethnic boundaries

Homeowners from and not from the immigrant experiences shared several characteristics. Some understood the risks that they undertook in originating a loan and had unrealistic expectations, while others blindly trusted the guidance of their realtors, brokers, relatives,

HOUSING STUDIES 13

and friends. The interviewed organizations felt that lack of financial knowledge prior to becoming a homeowner was widespread among those that later faced trouble.

For all of the interviewed homeowners, missing mortgage payments resulted from the confluence of household and housing changes and obligations that constrained a borrowers’ ability to pay (McCormack & Mazar, 2015; Saegert et al., 2009). Each one experienced unem-ployment or underemployment in their households during the downturn, which hindered their ability to make payments. In turn, all of the interviewed organizations had clients whose difficulty making payments originated from a job or income loss. Teresa’s husband was unemployed for two years, and Luis’ and Chien’s overtime hours were cut. Walt was unemployed for over three years; when he found another job, it paid only a fraction of his previous salary.

All of the interviewed homeowners experienced other changes to their household or home that compounded their difficulty making payments. Marcelo’s wife became pregnant with their second child, which led to a six-month maternity leave and thousands of dollars in health insurance bills, as well as additional costs from having a new baby. Guillermo was diagnosed with a serious illness that forced him to quit his real estate job and be hos-pitalized for over two months. Most of the interviewed homeowners estimated that their home value had declined since purchase. Underwater mortgages were widespread among the interviewed organizations’ clients.

Troubleshooting missed payments by pursuing a loan refinance or modification was a confusing, frustrating and, at times, predatory experience for homeowners interviewed and served by the interviewed organizations. The most common complaints were: a lack of transparency about their process and dual tracking, meaning that the servicer simultane-ously engaged in foreclosure and refinance or modification. Virtually all of the interviewed homeowners attempted to refinance or modify their loan, but only half were successful. The majority reported feeling unfairly treated by their lender, including most of those that eventually altered their loans. Almost all of the interviewed organizations observed their clients struggle to alter their loans or personally faced difficulties assisting them in this task. Yet, language and cultural barriers compounded immigrant homeowners’ difficulties in communicating with their loan servicers, as previously discussed.

Discussion and implications

Over seven million households lost their homes during the recent U.S. Great Recession (CoreLogic, 2014). There is emerging research on the experiences of households of color (e.g. Anacker et al., 2012; Lichtenstein & Weber, 2013); yet, relatively little is known about immigrants’ experiences (Allen, 2011; Cahill & Franklin, 2013; Painter & Yu, 2014). This research helps fill this gap by exploring the trade-offs that immigrants make navigating the housing market within their social and spatial ethnic boundaries.

Home equity remains the main way to accumulate wealth in communities of color (Tippett et al., 2014). Our research suggests that co-ethnics were gatekeepers of immigrant homeownership and wealth building during the recent Great Recession in Los Angeles County. Immigrant homeowners disproportionately relied on co-ethnics for advice and financial support, in part due to language, cultural, and household boundaries that impeded their engagement with mainstream institutions.


Reliance on co-ethnics helped immigrants build wealth through homeownership and access resources needed to weather economic shocks. Examples include pooling resources within multigenerational households and receiving counseling from linguistically and cultural competent non-profits. Yet, language and cultural barriers slowed and at times thwarted immigrants’ pursuit of loan refinance and modification when foreclosure was imminent. Providing linguistically and culturally competent counseling to immigrants while negotiating with their lenders emotionally and financially strained co-ethnic staff at supportive non-profits, which limited their efficacy. Transactions with co-ethnics also distorted immigrants’ perceptions of what being a homeowner would be like and what options were available when they had trouble making mortgage payments. This was most apparent through the roles played by co-ethnic lenders, attorneys, real estate professionals, and other brokers, who got immigrants into risky loans, counseled them for profit, and at times defrauded them, stripping them of wealth. Yet, these actions were not always inten-tional; some brokers may not have fully understood the products that they were hawking or may have been overly optimistic about clients’ ability to sustain homeownership. Further, these actors were often just the middlemen between clients and the larger financial system, where demand for their loans was cultivated.

The evidence reported in this article has implications beyond immigrants’ experience of foreclosure. Participants’ reliance on and use of ethnic networks indicate that there is an ethnic segmentation of the housing market, as suggested by the existing literature (e.g. Cahill & Franklin, 2013; Cortes et al., 2007; DeVerteuil, 2011; Johnston et al., 1997; McCormack & Mazar, 2015; Ratner, 1996; Zonta, 2012). Analyses of home buying and homeownership in areas with significant immigrant populations should factor in the role of ethnicity, even during non-crisis periods.

Our findings have three main limitations. First, they do not represent the experiences of the population of homeowners that defaulted or underwent foreclosure in Los Angeles County or the organizations that served them. Our sample is small and biased by self- selection. However, our research design captures the experiences of immigrant homeowners and immigrant-serving organizations associated with diverse ethnic communities in Los Angeles County. The results reported are generalizable to existing theories on how ethnic boundaries may shape immigrant homeowners’ outcomes.

Second, approximating people who have gone through the immigrant experience solely by speaking a language other than English in the home accounts for how assimilated they are into English-speaking American society but not their nativity status. Foreign-born per-sons who have long lived in the U.S. may primarily speak English in the home. Native-born persons who live and work in segregated ethnic communities may speak a language other than English in the home. Research more precisely examining differences in experiences between foreign- and native-born homeowners may arrive at different conclusions.

Third, we did not specifically ask the interviewed homeowners or organizations about their experiences with ethnic banks. These actors were rarely mentioned in the interviews. Thus, we are not able to contribute to the literature on the roles that these banks and, more broadly, transnational capital play in immigrants’ social and spatial boundaries and experi-ence of homeownership during the Great Recession, particularly in gateway regions like Los Angeles (e.g. Li et al., 2001, 2002; Simons et al., 2016; Szto, 2014; Zonta, 2012). Attention to these issues is a worthwhile direction for future research.

HOUSING STUDIES 15

Remedial policies must at once help immigrants to transcend and become more resilient in their ethnic boundaries. Investing in homebuyer education and counseling programs, document translation, and linguistically and culturally competent banking and loan ser-vicing staff would help bridge immigrants and mainstream institutions and resources and protect immigrants from foreclosure. Providing greater funding to ethnic-based community organizations would help strengthen ethnically bounded institutions and resources. Relaxing HUD’s maximum hours/funding per client requirements for organizations serving a major-ity immigrant clientele and allowing banks to comply with the Community Reinvestment Act1 by giving grants to linguistically and culturally competent housing counselors in their depositors’ communities would be a start.

Yet, ethnic-based community organizations cannot make homeownership more sustaina-ble for immigrants alone. Mainstream lenders, advocacy and professional organizations, and government agencies have a larger role to play. Mainstream institutions have an obligation to translate loan documents at origination and convey clear guidelines and standards to homeowners about which documents need to be translated and which ones are acceptable in other languages during refinancing and modification. Advocacy and professional organ-izations and government agencies should continue to push for new legislation to change the status quo.2 Several of the organizations that we interviewed were already engaged in this work, but the time is ripe for a broader social movement for sustainable immigrant homeownership.

Notes1. The Community Reinvestment Act (1977) requires banks to proactively lend to communities

where they take deposits.2. For instance, California state law now requires mortgage brokers and lawyers negotiating

loan modification to translate documents into five languages: Spanish, Chinese, Tagalog, Vietnamese, and Korean. However, non-compliance fines are low ($2500 for the first offence) and banks and borrowers speaking less common languages and dialects (e.g. Thai or Khmer) are not covered (Shikai, 2012).

Disclosure statementNo potential conflict of interest was reported by the authors.

FundingThis work was supported by the Ford Foundation Building Economic Security Over a Lifetime Initiative.

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