Kudos to The New Yorker’s Peter Boyer for going behind the headlines of the Addie Polk (the 90-year-old woman who shot herself when the sheriff came to evict her—story to provide a sensitive, nuanced account of the foreclosure crisis in Akron, Ohio.
What is striking about Addie Polk’s loan is that it wasn’t “predatory,” in the common usage of that term. Her 2004 Countrywide mortgage was a conventional prime loan, with a fixed thirty-year mortgage. In Adair’s view, that makes Addie no less a victim. “Just because Addie Polk’s loan is not an adjustable-rate mortgage,” she said, “the fact that this was someone who had her home paid off and was encouraged to mortgage her home, time after time, without sound lending practices, makes it a predatory loan.”
When Fannie Mae (or its younger cousin, Freddie Mac) bought a loan, it pooled it with other loans and sold it to investors as a security—like a share of stock. These mortgage-backed securities came to be prized by investors, because they were seen as being a safe investment, backed, as they were, by American real estate. As home prices spiralled upward and demand for the securities increased, here and abroad, so did marketplace pressure to create more mortgages. Primary lending institutions were happy to oblige; it’s easier to make a risky loan if it’s going to be bought by Fannie Mae, bundled with other loans, and turned into a security. Whether it got bundled and sold again or stayed on Fannie’s books, Addie Polk’s mortgage almost certainly found its way into someone’s investment portfolio.
Like our own Ryan Chittum’s frank piece about his family’s foreclosure experience, Boyer provides the shades-of-gray complexity that by-the-numbers reporting often omits.
Ohio has provided such rich fodder for reporting recently—George Packer’s excellent piece on undecided voters comes to mind—that perhaps more writers should forgo India’s journalistic lure and book a ticket for Akron, not Agra.