Brockton Mayor James Harrington speaks June 4 in a classroom at the Multicultural Banking Center currently under development at Brockton’s HarborOne Credit Union. The center, which will be housed at HarborOne’s former headquarters at 68 Legion Parkway in downtown Brockton, is expected to open in September.
It was gray and dismal outside last Monday, as Tropical Storm Barry battered local highways and made Brockton’s Legion Parkway a rainy obstacle course.
But inside HarborOne Credit Union, it was warm, coffee was brewing, and President and Chief Executive Officer James Blake was beaming as he introduced his newest entrepreneurial idea to a small crowd of media representatives, local officials and supporters.
It’s the Multicultural Banking Center, an idea Blake and his staff came up with earlier this year as a way to combat Massachusetts’ growing home-foreclosure crisis.
It’s a venture the credit union’s staffers think may be one of the first of its kind in the country – and it will be based in a region particularly hard-hit by foreclosures.
“Lawrence was No. 1 – now Brockton has surpassed it,” noted Normand Grenier, executive director of Neighborhood Housing Services of the South Shore, an agency that hopes to partner with HarborOne on the venture. The credit union serves Plymouth, Barnstable, Bristol and Norfolk counties.
The Federal Reserve Bank of Boston reported in March that Brockton, Springfield and Lawrence had the highest foreclosure petition rates at the end of last year. The number of actual foreclosure auctions – the final step in a foreclosure proceeding – announced in Plymouth, Barnstable and Bristol counties rose between 40 percent and 54 percent from 2005 to 2006, according to statistics from The Warren Group, parent company of Banker & Tradesman. In Norfolk County, the number rose by 21 percent, from 272 to 330.
More than 19,000 foreclosure petitions were filed statewide in 2006, surpassing the previous high of 17,000 set when home prices dove in 1991. The current crisis has been attributed in varying degrees to an exploding mortgage-product market, subprime loans, homebuyers’ lack of knowledge about those loans and predatory lenders.
Blake plans for the university-style center to open at HarborOne’s former headquarters, adjacent to its Legion Parkway branch, in September. The headquarters have been vacant since they were moved to Oak Street in Brockton in 2005.
Vice President Aguinaldo Fonseca, a native of Cape Verde who has overseen minority business development at HarborOne’s mortgage division since 2001, will direct it with help from administrative staff and an additional business development officer to be hired over the summer.
Classes in personal finance, first-time homebuying, foreclosure prevention and post-foreclosure counseling, will be taught by credit union employees and representatives from local nonprofit groups in English, Spanish, French and Portuguese, to accommodate Brockton’s growing immigrant population.
Most will be free, with the exception of an additional offering, English as a Second Language, for which a small fee will be charged. HarborOne is still compiling lists of nonprofits with which it plans to work.
Those who complete a to-be-designated course series will be able to open a HarborOne checking account and have access to a guaranteed $500 line of credit, specialized loans and other credit union products if they want them, regardless of their credit history.
Blake said his $1.4 billion credit union expects to attract new members through the classes, but said it’s not just his personal business interests at stake. He said HarborOne wants to help improve the community in which it’s based, by offering residents who may be susceptible to the claims of unscrupulous or expensive financial service providers a chance to do business with responsible ones.
“People who use check cashing services and other kinds of lending programs don’t trust [banks or credit unions] and don’t know how to get out of that cycle,” he said. “We hope this will help people develop trust.”
‘A Good Example’
Brockton Mayor James Harrington said he sees the proposed center as a way to prevent more foreclosures in his city.
“The city is very proud it’s happening here,” the mayor noted, praising HarborOne for taking action rather than simply studying the problem.
The March Federal Reserve Bank report cited “early intervention” as the key to preventing foreclosures, saying that category could include education, legal advice, special or subsidized loan products, and regulatory responses.
Massachusetts Banking Commissioner Steven Antonakes, speaking at last Monday’s event, called access to affordable bank products and services such as those HarborOne will be offering through the Multicultural Banking Center one of the “critical” ways financial institutions can help the “real people with real homes” affected by foreclosures.
Blake said he anticipates the center will create goodwill toward HarborOne, something he acknowledges will be good for business.
“Because we’re helping [the community], we expect to gain business,” he said, whether it comes from class participants or people who simply appreciate HarborOne’s community efforts.
Board member Barry Koretz added that the credit union, which as a state-chartered institution is subject to the Community Reinvestment Act, has been rated “outstanding” in recent years and is always interested in ways it can maintain that status.
HarborOne CRA Officer Leo MacNeil predicted that the new center will only help the credit union’s CRA rating.
“Not that CRA drives anything,” he said, “but as the credit union industry nationally struggles with CRA issues, it does help you keep your eye on the ball.”
HarborOne’s own part in the foreclosure explosion it hopes to reverse is minimal. The credit union reports it has only foreclosed on three properties in 10 years, and board member Joseph Barry said HarborOne has never offered subprime loans.
Several South Shore nonprofits, as well as Boston’s consul general of Cape Verde, Maria de Jesus Veiga Miranda Mascarenhas, praised HarborOne for moving forward with the Multicultural Banking Center, and many said they hope to be involved.
“HarborOne is a good example of how business should work and act,” said Mascarenhas.
Noting that Brockton’s Cape Verdean population is one of the largest minority groups in the city, she added, “And I think it will be one of the [center’s] greatest beneficiaries.”
Carol DeLorey, a member of the Brockton Interfaith Council who attends monthly meetings of the Brockton Housing Partnership’s coalition of 13 lenders and nonprofits seeking to help low- and moderate-income homeowners in the region, said the Multicultural Banking Center will represent another way to help immigrants – which, she said, is a valuable thing.
DeLorey recalled that she and her husband were able to help a family of Vietnam War refugees find housing, clothing and banking services in Brockton in the late 1970s.
“I am happy we’re finding new ways of helping immigrants,” she said. “They won’t be taken advantage of any longer.”
