The trend seemed to be driven largely by the fact that many immigrants were undocumented and could not provide the social security number that conventional lenders then uniformly required before they would write a mortgage. As a result, a number of alternative practices were emerging outside the normal channels.

LAET was worried that unsuspecting buyers were going to end up getting burned. They suggested two steps: drafting a model lease-purchase agreement that would offer more protection for buyers, and educating key audiences about the potential dangers embedded in these lease-purchase arrangements. Chris was well-equipped to take on this project, since he had worked in the real estate business and had studied real estate finance. Nevertheless, he ran into many surprises and frustrations as he tackled the job. For instance,

Drafting a model lease-purchase agreement turned out to be difficult. Repeatedly, Chris would identify a weakness in the lease-purchase approach, only to realize that its real solution was a mortgage, not contractual re-drafting. Meanwhile the main barrier to obtaining a mortgage lay with federal immigration policy--certainly not something Chris was in a position to change through consumer education.

As for key audiences, it was hard to figure out exactly who that was. Immigrant home buyers themselves were obviously important. However, they were a difficult population to find and communicate with in time to keep them out of trouble. Chris and LAET discussed two other audiences that might be easier to identify and reach: first, the sellers of homes, and second, general service providers to the Latino community, since they were often in a position to provide advice.

It was decided to target service providers and to start by developing a brochure. But Chris still faced many challenges. The concepts and vocabulary involved in real estate finance are complex. It was also hard to explain lease-purchase agreements in isolation. As Chris observed:

Even though I tried to take language into account, it is very hard to explain anything in the home financing arena in simple terms. In my first attempt to draft a "warning brochure" about lease-purchase, the necessity of providing a little bit more background about the home-buying process became clear. My next move--an attempt at a simple version of a talking-points memo on home-buying in general--was close to ten pages and probably required financing classes to understand it! While I thought all of the information was important, not all of the information really served to aid a general understanding. . . . After all, there is an entire law school course devoted to real estate financing. So, I just started deleting everything I thought was not absolutely necessary. I ended up with a product that made more sense because it included less information to add to any confusion. From there, I decided to merge my original brochure with my talking points in order to come up with the current version of my educational materials directed to service providers so that they can understand the basic notions of what the dangers of lease-purchase agreements are.

LAET was very pleased with Chris's final draft, and they expected to share it with service providers, bankers and others interested in the problem of increased access to credit for immigrant home buyers. This area is a volatile one, in terms of both public and private policy, and I should note that progress has been made in some areas since Chris finished his work.

To see Chris's first draft of a brochure, focused on lease purchase, click here .
To see his final draft, simpler and with more general background, click here.

Project carried out: Fall 2003
Exhibit developed: Summer 2004