10/01/2025
I want to start with a simple truth: foreclosure is not a personal failure. It’s not a sign that you’re bad with money or that you didn’t try hard enough. It’s the result of a system that was designed, from the ground up, to be predatory.
How we got here
Back in the 1980s, the federal government pulled billions of dollars out of affordable housing programs and shifted responsibility for housing into the private market. Instead of supporting families directly, they gave tax breaks and incentives to banks and investors. That meant housing stopped being treated as a human need, and started being treated as a profit machine.
At the same time, wages for regular people stalled. By the 2000s, many working families were paying 60%, 70%, even 90% of their income just to keep a roof overhead. Into this gap stepped mortgage companies, not local banks you could trust, but unregulated brokers with no long-term ties to our communities.
What predatory lending looked like
These companies made loans that were never meant to last.
They offered mortgages with no money down, even if you couldn’t realistically afford them.
They gave “teaser rates” for 2 or 3 years, then hit families with payment shock, sudden jumps of hundreds of dollars a month.
They added hidden fees, back taxes, and prepayment penalties that made refinancing almost impossible.
And they often exaggerated people’s income on paperwork without telling them.
Even Justice Ralph Gants of the Massachusetts Supreme Judicial Court said these loans were inherently unfair under consumer law, because lenders knew from the start they would fail.
The bigger picture
These weren’t isolated mistakes. This was a business model. Lenders made their money upfront in fees and commissions, then bundled these toxic loans and sold them on Wall Street. Rating agencies called them “AAA safe investments,” when in fact they were a ticking time bomb.
When the housing bubble burst, regular people lost everything! Their homes, their credit, their stability... meanwhile, banks got bailed out with our tax dollars. In Massachusetts alone, families lost nearly $59 billion in personal wealth in just two years.
Why foreclosure is not your fault
So if you’ve gone through foreclosure or are facing it now, remember this:
You did not create the housing bubble.
You did not design loans meant to fail.
You did not deregulate Wall Street.
You were sold a product that was intentionally designed to fail. That’s not a personal flaw. That’s systemic exploitation.
What we can do
The good news is people are fighting back. Communities across Massachusetts have organized to demand fair loan modifications, to keep tenants in their homes after foreclosure, and to push for mediation before banks can take a house. And there’s proof that keeping families in their homes is better for everyone — even lenders recover more value when they modify instead of foreclose.
Closing
So the next time someone blames homeowners for foreclosure, remember: this was not about individual failure. This was about predatory systems built to profit off our communities. And if we recognize that truth, we can stop carrying the shame and start fighting for solutions that protect people, not profits.
