Neighborhood Housing Assignment:
Mercy Portfolio Services has received $100 million in TARP funds to help Chicago area homeowners who are facing foreclosure. They will buy up distressed mortgage debt and offer to forgive some of the debt so the homeowner will no longer be underwater. They will work with the homeowner to help them become current. If successful, they will help the homeowner refinance. Alternatively, if this fails they will foreclose and sell the property. (See Crain’s Chicago Business, Sept. 26, 2011, p. 3.)
An agent of Mercy has asked for your help in evaluating the strengths and weaknesses in Chicago’s 77 neighborhoods to determine where it is best to place their funds. They would like to target neighborhoods where their investment is more likely to result in a successful rescue of homeowners from foreclosure. Mercy needs a report that provides basic economic information on the neighborhood (e.g., available information on neighborhood history, employment/unemployment, income, commercial development, etc.), recent foreclosure and lending activity, and the movement of home prices. The agent asks that you provide information on one neighborhood. You can choose your own neighborhood or one that you find interesting or one where you can find the best data.
You can view some basic lending and foreclosure data by neighborhood on the Woodstock Institute website in their Fact book (http://www.woodstockinst.org/factbook/). You can use this data to discuss how hard the neighborhood has been hit by foreclosure, and who was and still is lending to this neighborhood. A comparison of data on this neighborhood to data for Chicago as a whole will provide some perspective.
You can get home price information from the October 2010 and October 2011 issues of Chicago Magazine. The cover stories provides a good overview about current housing markets in Chicago. The 2010 issue is available on line at http://www.chicagomag.com/Chicago-Magazine/October-2010/Real-Estate-2010-House-Prices-in-Chicago-and-the-Suburbs/. The 2011 issue is available at http://www.chicagomag.com/Chicago-Magazine/October-2011/Real-Estate-2011-House-Prices-in-Chicago-and-the-Suburbs/ and in the Chicago Public Library. Sales and price data will provide some insight into change in value and the whether there is relatively weak or strong sales activity. It will be useful to compare data for your neighborhood to Chicago area averages or to data for a neighborhood that you think is comparable.
Accompanying your written report with graphic information on prices, sales, foreclosure and lending will increase its information value for Mercy.
You can bring in any anecdotal information you have about the neighborhood such as schools, employment, parks, transportation, etc. Google your neighborhood name and see what additional information and opinion is available.
Finally, Mercy would appreciate your bottom line opinion on whether their program is likely to help homeowners in this neighborhood. There is no right or wrong answer. You will be graded on your presentation of the information you choose to include and on your overall assessment of whether the neighborhood will be a good fit for the Mercy program.
Your paper should be 3-4 pages double spaced, not including any attached charts and/or graphs.