10 years later, Great Recession’s aftermath still resonates for many
Jonnelle Marte and Renae Merle
The global financial crisis coursed through sprawling institutions: governments and the world’s biggest companies, leaving a wake of uncertainty in its path.
Ultimately, it upended the course of lives — thwarting career paths and retirement plans for people well beyond Wall Street and Washington. This is the story of a couple who felt the crisis intimately.
The Islases
Before the recession hit, Maria and Elias Islas made a life change in 2006 that was supposed to usher in a new level of financial security for their family.
They became landlords in San Bernardino County, California, buying two small apartment buildings using the equity from their family home, which had doubled in value over four years. They moved into one of the units and rented out the others, figuring that one day the mortgages would be paid and they could pocket the rental income.
Within two years, their plan backfired.
The year they bought the apartments, Elias Islas, now 54, suffered a neck injury at the distribution center where he worked. Meanwhile the housing market, which had seemed to lift the Islases and millions of other families to a new level of wealth and economic possibility, quickly collapsed. By 2008, their properties had plummeted in value, and their tenants, facing their own financial struggles, began to fall behind on the rent.
Their equity was wiped out. After they filed for bankruptcy in an effort to save the second apartment building, their credit was ruined.
Still, “we didn’t give up,” Elias Islas said in Spanish. “We knew we had to fix everything to be able to buy another house.”
The Islases were among the millions of Americans who lost their homes in the crisis. The financial devastation that followed put a dent in the national homeownership rate, which increased this year for the first time in more than a decade. Housing experts say the rate, which hit 64 percent this spring, may never return to the peak of 69.1 percent in 2005.
Many people who owned homes before the downturn do not have the credit, means or desire to own homes again. Those who do have faced a long, slow recovery to make the leap.
For the Islases, the decade has been marked by healing. They rebuilt their credit from scratch.
First they opened a secured credit card with a $300 limit. They used it regularly and paid it in full every month. Each payment edged them closer to a larger credit limit and a higher score.
Earlier this year, Islas said, he felt a sense of desperation that it might not work out. The couple’s credit had rebounded, but they didn’t have a down payment.
In the spring their luck turned: They were approved for $20,000 in down-payment assistance from a localnonprofit,NeighborhoodHousing Services of the Inland Empire.
In July, they closed on a $270,000 home with three bedrooms and two bathrooms about 35 miles north of San Bernardino.
Islas says it is beautiful. There is a covered patio, a gazebo and a hot tub in the backyard. It has a fireplace and a spacious living room.
The Islases, who were both born in Mexico and have lived for decades in the United States, said they still believe homeownership can help them build wealth, even after going through the bankruptcy and the short sales that wiped out their savings.
“With our own property, if something happens we can sell the house and have some equity,” said Maria Islas, 51. “If we are renting, then we don’t have anything to show for it.”