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Loan Ranger 

A mortgage company branches out into an undeserved mortgage market.

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By Ben Joravsky

The house in Hermosa, a working-class neighborhood on the northwest side, is on a lot clotted with trash. To many a passerby, it looks ready to fall apart.

But despite the peeling paint, to Eduardo Camacho it represents the promised land. "It's the American dream to own a house--to own property," he says. "And this is where first-time Hispanic home owners will come to buy."

These days Camacho is feeling particularly confident about the future of the American dream. Several months ago, Irwin Mortgage, a multi-billion-dollar corporation, hired him to set up shop in the city and start peddling home-buyer loans, primarily to the city's ever-growing Hispanic population. "No one else is doing this--no one else is going after this market like we are," says Camacho. "I think we're going to be successful. But if we're not, well that's the risk."

The history of buying and financing homes in Chicago has not always been pretty. In the 1950s and '60s many real estate companies, banks, and mortgage lenders were responsible for bottling black residents into segregated slums, which were starved for investment because of redlining lending policies. As the surge in southern migration made it impossible to contain black residents in the same old neighborhoods, the industry mastered an equally repulsive practice. They became peddlers of panic, relentlessly scaring white home owners into selling fast before--to use an infamous phrase--it was too late.

Panic peddling has slowed, probably because black migration has petered out. Now the watchword among reformers is predatory lending--the process of making high-interest loans to consumers who don't have the money to meet their obligation.

Camacho knows this history--even if he feels that lenders are often unfairly maligned for demographic and economic forces they don't control--having lived though it and studied it. He was born in Wicker Park in 1954 and raised in Lincoln Park when it was a predominantly working-class Puerto Rican community. He graduated from Lane Tech High School and worked his way through college and grad school, earning a BA at Northeastern Illinois University and a master's in social work from the University of Chicago. I first met him almost 20 years ago when he was a young researcher for the Community Renewal Society, a not-for-profit social service organization that, among other things, publishes the Chicago Reporter. Throughout the 80s, Camacho teamed up with various writers from the Reporter (myself included) to write studies on race relations, politics, Hispanic issues, and other urban matters.

His passion was real estate; he studied the real estate pages the way his peers pored over the sports section; he spent hours driving around neighborhoods to keep track of rehabs, gut jobs, and new construction. By 1989 he'd tired of the not-for-profit world of research and social work, so he went to work as a loan officer for Saint Paul Federal while earning his MBA from the University of Chicago. "I was going to save the city--one loan at a time," he says.

At Saint Paul he met Angel Guzman, a loan officer with his own rags-to-riches story to tell. "I was born in Puerto Rico in 1965 and didn't come here until I was three," says Guzman. "My father died when he was young, and my mother's sister already lived in Chicago. She convinced my mother to come here and make a new life."

For a few years, Guzman, his mother, and his older sister lived in a small apartment in Uptown; then they moved to another in Humboldt Park. He boxed at the Park District field house ("I was a bantamweight--115 pounds") and attended Clemente High School. In 1986, two years after graduating from Clemente, he was 20 years old, married, the father of a baby girl, and a bagger at a local grocery store. "I guess there's no formula for success," he says. "I didn't start out wanting to get into banking. I didn't know what I wanted to do. A friend of my mother-in-law saw how miserable I was at the grocery store and suggested that they were hiring tellers at Northwest Savings over at Western and Fullerton. So I went down and applied."

He got the job and found his vocation. "I liked the professional atmosphere. I liked dressing up and working with the public. It was a challenge. Within three months I was promoted. I went from teller to assistant supervisor to department manager to loan officer to community reinvestment officer. I think a lot of consumers identified with me. I was Hispanic. I lived in the area. It was a big deal for me when I was finally able to buy my first house. My mother, she worked hard for years in a bakery and finally was able to buy her own house three years ago. There are so many people like her--working hard, putting a little away."

Meanwhile, in 1999, Camacho left Saint Paul after it was purchased by a larger institution. He thought about becoming a developer. Then Irwin Mortgage got his name from a headhunter and came calling with the idea of going after Hispanic home buyers. "I wrote up a business plan and they said, 'Let's do it,'" says Camacho. "We're not just lending to Hispanics. We'll lend to anyone. But our base will be the Hispanic market. It's huge and untouched. According to the census there were almost 900,000 Hispanics in the six-county metropolitan region in 1990. There must be well over a million by now."

One of his first hires was Guzman, who's the sales manager. In May they opened an office at 1623 N. Western. "It's been a rush--we're still hiring our staff," says Camacho. "Is it a gamble? Yes. People don't understand there's a very low margin of profit in mortgage lending. I tell people it's like selling soap. You have to do a lot of loans. We have to do about $100 million worth of loans--that's about 1,000 mortgages. That's a lot of soap."

To spread the word, they've met with community groups, civic groups, and real estate agents. "Real estate agents are key," says Camacho. "We think anyone around here would come to us for a loan. OK, maybe the yuppie in Wicker Park won't come to us because he's surfing the Internet looking for the most competitive rates. But the first-time home owner probably doesn't have access to the Internet. Or he's a little more apprehensive about getting a loan. So he comes here. We're in the neighborhood. The people who process the loans are in the back. You don't have to wait on the phone-- we'll get it done fast. You don't like it? You can come back and yell at us. We're right here. I love the location. I love Western Avenue. It's the center of the universe. There's a couple of hundred thousand cars going up and down that street every day."

The world he hopes to market, however, is the bungalow belt beyond Western Avenue. "It's Hermosa and Belmont Cragin and Avondale and all the other neighborhoods that most people from Lincoln Park or Wicker Park or Bucktown haven't even heard of. They're not trendy. They're not being written up. This is where the people who wash the dishes or cook the food or mow the lawn or take care of the kids--this is where they will look to live when they buy. If it's affordable--you can get a house up there for, I don't know, $125,000. It's because it's still a little raw."

To prove his point, he hops into his car to take a tour. It's in the middle of a steaming Thursday afternoon. Up and down the street people are waiting for buses and gasping in the heat. Camacho intends to head west on North Avenue but he can't help making a sudden detour heading east instead, to Leavitt. "I just have to show you this--I never thought I'd see this," he says.

He pulls up to the 1700 block of North Leavitt. On one side of the street are a few low-income town houses. On the other is a mansion, still under construction, with a $999,000 asking price. "You've got subsidized housing on one side and a million-dollar home on the other," he says. "It blows my mind. Look--there's a yuppie."

On the sidewalk a tall woman in running shoes and jogging shorts is loading a box into her car. An old white man drives by in a battered Chevy. A Clemente High School gym class consisting of about a dozen Hispanic girls and led by boys basketball coach Jim Dagostino walks by. "It's the classic mix--an old white guy, young Hispanics, and one or two yuppies," Camacho says.

He heads back toward North Avenue but makes one last detour, up Rockwell. "I have to show you this--you won't believe it," he says. He passes old houses with flaking paint, an abandoned car, a vacant lot, and train tracks before reaching a large multistory condo complex under development. The sign out front says two bedrooms start in the "mid-200s."

"Look at that house across the street," he says. "They don't have air-conditioning or screens. They have to keep the windows open just to get a little breeze. In America today, not being able to buy screens is poverty. I mean, this is still a very rough neighborhood. Not far from here there was a drive-by shooting. And yet they're selling two-bedroom condos, not even a house, for $250,000. On this block 25 years ago you could have bought a house for $15,000. I don't understand this phenomenon. I can't explain it. I do assume that the person who buys that condo does not do so because he wants to live next to poverty. They see the neighborhood as it will be--or as they want it to be--not as it is."

He heads further west, through Logan Square and into Hermosa and Belmont Cragin. He drives down Belden and Shakespeare and Knox and Keating. It's classic Chicago--row after row of brownstones. "It looks like Lakeview--20 years ago. But look closely and you can see it's a little raw. Look--there's glass on the street. There's some abandoned cars. There's some litter. The houses need painting. They're not knocking down houses to put up mansions or putting up condos with 'artists' lofts.'

"It's not a bad neighborhood--it's just a little rough. There are neighborhoods like this all over Chicago. This is where our customers will want to live. I don't know how long the great boom will last. I don't know how long young professionals will be moving next to poverty. But I do believe that people will always be looking to buy on blocks like this."

Art accompanying story in printed newspaper (not available in this archive): photo/Jon Randolph.

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