How Financial Issues
Affect Housing
Opportunities
Julie Kalkowski
Financial Hope Collaborative
Creighton University
Maggie Kalkowski
International Center of the Heartland & Refugee Services
Lutheran Family Services
Recent Headlines
Wrong to prey on military families (OWH, September 2010)
Record number of foreclosures for 2010 third
quarter. (NPR, 2010)
Many bankruptcies linked to health costs, report
says (OWH, February 3, 2005)
Urge for quick cash cuts into refunds for lowincome filers (OWH, March 18, 2005)
Report details health, wealth gap for blacks
(OWH, April 6, 2005)
The “Unbanked”
 20% of US Households are unbanked
(Federal Reserve Bank, 2010)
 83% of unbanked families earn less than
$25,000 annually (Carr and Schuetz, 2004)
 25% of African American and Hispanic families
are unbanked (Carr and Schuetz, 2004)
 30-40 million US households are either
unbanked or subprime credit consumers
(Weissbourd, 2002)
The “Unbanked”
 Latino population totals 13% of US population
and has an estimated purchasing power of
$600 billion dollars yet 36% (including 56% of
immigrants) is estimated to be unbanked
(Aizcorbe, Kennickell & Moore, 2003)
 Visa U.S.A. estimates that payroll checks worth
$500 billion are issued each year to un-banked
employees (Seidman & Tescher, 2004)
 Low income families spend 5% of their annual net
income on basic financial transactions. (Federal Reserve Bank,
2010)
Credit Card problems
 Approximately 50% of US households
are living paycheck to paycheck. (Center for
Financial Services Innovation, 2010)
 Average household credit card debt in
the U.S. in 2004 was $8,400 (Consumer Credit
Counseling Services)
 In 2004 Americans paid $14.8 billion in
credit card penalty fees alone (Hightower &
Frazer, 2005)
Financial Education
Issues
 This year more Americans will file for bankruptcy
than will graduate from college (Wallwork Winik, 2005)
 Research suggest that 15-20% of employees have
financial problems severe enough to negatively
affect productivity
 A financially stressed employee spends an average
of 20 hours/month of work time on personal
financial problems
Source: Federal Reserve Bank of KC & The Federal
Reserve Bank of Atlanta
Examples of
Fringe Financial Services
 Payroll Check Cashing
 Buy Here, Pay Here loans
 Payday Loans
 Rent to Own
Payroll Check Cashing
 Average cost to cash a check at a payroll
casher is $12/week x 52 weeks= $624.00
 $624.00 can pay for….
 Car payment
 Down payment on a house (NIFA)
 At US Bank, without a banking account, it is
only $5.00 to cash a paycheck
 $5/week x 52 weeks = $260, still leaving $364 in
savings annually.
 Using mainstream banking services can pay off
even without an existing account.
“Buy Here, Pay Here”
Car Loans
$10,000
36 month car loan
Buy Here Pay Here
Bank Loan @6.7%
Car Loan @28%
 Monthly Payment:
$307.40
Total Interest Paid =
$1066.44
 Monthly Payment:
$413.64
Total Interest Paid =
$4890.89
FYI: Sub prime loans
account for 8% of newcar financing and 14%
of used car loans
(Consumer Reports, 1998)
Payday Loan Industry
 There are more Payday Loans businesses
than Burger King and McDonalds
combined. (Center for Financial Services Innovation, 2010)
 As of January, 2009, there were 107
payday loan businesses operating in the
metro area----a 28% increase since April
2005.
Cost of a Payday Loan
 With proof of a checking account, a
paycheck stub and a copy of your last
utility bill, many people can get an
advance on a future paycheck.
 The average person rolls over a payday
loan 13 times. The average annualized
interest rate for payday lenders is 470%.
(Source: Annie E. Casey Foundation, Woodstock Institute, sample taken
from Illinois.)
Rent to Own
 Ace Rent-to-Own (Saddle Creek)
Standard Refrigerator - $499

$12.99/week and if you can purchase
appliance within 90 days the appliance
cost = $499.00
 $12.99 X 12 weeks = $155.88.
 Week 13 pay $343.12 to equal
purchase price of $499.
 If unable to pay off balance, you are
required to continue paying $12.99
for an additional 79 weeks (91
weeks total)
 $12.99/week x 91 weeks=
$1,182.09
 NE Furniture Mart
Standard Refrigerator
= $380.00

This is over 3 times the NE
Furniture Mart price
Overdrawn Checks
Average charge:
$35 to $45 is the standard overdraft charge for a
bounced check
OR
$10.00 overdraft charge if you have overdraft
protection on your account
 Over 50% of the fee based income
earned by financial institutions in 2009
came from bounced checks. (Center for Financial
Services Innovation, 2010)
What Works…Financial
Education
Benefits to the employer
 Reduces absenteeism, increases employee
productivity, increases contributions to the company
401(k), increases employee’s allegiance to
company, decreases employer costs related to
wage garnishments and bankruptcies
Benefits to employee
 Changes behaviors that negatively affect job
performance, builds assets & reduces debt, allows
for a higher level of participation in employerprovided benefits
Source: Federal Reserve Bank of KC & The Federal Reserve
Bank of Atlanta
Entering the Economic
Mainstream
 6 banks & 3 credit union have agreed to offer
Bank on the Heartland Accounts beginning in
March 2011.
 15 businesses now offer Workplace Financial
Education.
 86% graduation rate for the Financial Success
Program in 2010—includes trainer, money
management system & one year of financial
coaching
Promising Ideas
 Small Dollar Loan Pilot
 Easy Green Pig software:
http://easygreenpig.com/
 Employers requiring bank accounts---QLI,
Omaha & Cargill in Fort Morgan, CO.
 Leveraging EITC returns
 Your ideas???
Newcomers to Nebraska
 Spanish Speakers – Mexicans, Guatemalans,
Salvadorans, Cubans
 Burmese – Karen, Karenni, Kachin, Chin
 Bhutanese
 Iraqi
 Somali
 Sudanese
 Eritreans
 Chinese - professionals
Characteristics of
Newcomers
 Education level – limited formal
education
 Agrarian cultures
 Concept of ownership
 Religious influence on home ownership
 Mobility issues
 General mistrust/knowledge of banking
institutions
Characteristics (cont.)
SS# & ITINs – sending $ back home
Undocumented
Banking issues – late fees, debit cards
No history of saving or asset building
opportunities
 Inability to navigate the “system”
 Not able to take advantage of unknown
opportunities
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Impact on Housing
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Older apartments/houses
High utility bills
Landlord/tenant rights & responsibilities
Multiple families living together – country
of origin traditions
Barriers to Home
Ownership
 Concept of credit – credit scores
 Refugees enter the country in debt
 Benefits of homeownership
 Home maintenance
 Undocumented relying on goodness of
others
 Rules of the game
 Language
Overcoming Barriers
 Education – both newcomers & housing
agencies
 Partnerships between new communities and
housing agencies
 Build trust by going to the people – at their
community center or place of worship
 Establish contact with community leaders
 Use interpreters
Success Stories
 Habitat for Humanity
 Due to length of time in the country,
Sudanese have taken advantage of this
 Burmese – after 5 -7 years, beginning to to
access this opportunity
 Karen have purchased nearly 15 homes
– have found inspector they trust
 Individual realtors have hired Spanish
speakers to facilitate the process
Contact info:
Julie Kalkowski
Financial Hope Collaborative
Creighton University
402.280-3792
juliekalkowski@creighton.edu
Maggie Kalkowski
International Center of the Heartland &
Refugee Services
Lutheran Family Services of Nebraska
402.536-3527
mkalkowski@lfsneb.org