Local Catholics helped effort to end contract buying

Clyde Ross was working two jobs in the summer of 1967. His wife, Lillie, worked too, but between them, they could barely make ends meet, feeding and educating five children, and hold onto the house they bought on Flournoy Street in the city’s Lawndale neighborhood.

That was the year he met Jack Macnamara, then a Jesuit seminarian, who moved into the neighborhood with hopes of organizing the community. Within a year, Ross was serving as co-chairman of the newly formed Contract Buyers League, an organization that brought together more than 500 residents on the South and West sides who wanted to change a system of predatory home pricing and sales that effectively kept black families from amassing wealth the same way white families did.

While the league had success in persuading sellers to renegotiate the contracts, Macnamara said it wasn’t a complete victory. Two lawsuits filed to stop the predatory lending practice failed, and contract selling in a slightly altered form continues today.

At the same time, as the Contract Buyers League approaches its 50th anniverary, more people are paying attention to the way a community came together to advocate for its members.

The Contract Buyers League started in the basement of the now-closed Presentation Church, 743 S. Springfield Ave., which was pastored by Msgr. Jack Egan, who was also director of the archdicoese’s Office of Urban Affairs. Macnamara and several other Jesuit seminarians had been coming to Lawndale every weekend, and Macnamara asked Egan to allow him to move in for the summer and get some college students to help organize.

They went block by block and house by house, listening to the residents talk about their lives.

"I was sitting in a living room with a widow with four kids who worked for the post office and made $5,200 a year, and that was a pretty good wage then," said McNamara, now 79 and a visiting scholar at Loyola University Chicago’s Center for Urban Research and Learning. "Her mother lived with them and worked nights scrubbing floors in a hospital for $4,000 a year, so they should have been doing all right. And she said, ‘I think I could make it if we didn’t have this huge house payment.’"

She told Macnamara she was paying $248 a month on her house; after helping his mother with his own family’s affairs following his father’s death, Macnamara knew his parents’ payment for their home in Skokie was $108 a month.

"Well, I knew something was wrong," he said.

Around the same time, Egan introduced him to Ruth Wells, another neighborhood resident who approached the priest after the contract holder on her house tried to impose a $1,000 insurance fee on her.

Wells and Ross, now 93, were among the homeowners that started meeting at Presentation every Wednesday, sharing a potluck meal and working out their plans. That group eventually swelled to more than 500 families.

Title searches found that speculators in Lawndale were buying houses and turning them around to sell on contract weeks later, at a profit of $10,000 or more, as the neighborhood underwent a rapid transition from white to black. The black families purchasing the homes were unable to get traditional mortgages because the neighborhood was redlined, so they ended up buying on installment contracts that did not offer the protections of a mortgage, and had higher interest rates. Most of the black families, if they completed their contracts, would end up paying $20,000 more than a white family for the same home.

The Ross family bought the house on an installment contract in 1961 from the real estate speculator who bought it from the family who lived there before him. The speculator bought it for $12,000; weeks later, he sold it to Ross for $26,000. Under the terms of the contract, Ross was to get no equity in the home until it was completely paid off in 20 years, despite being responsible for maintenance, property taxes and other expenses. If he missed even one payment, his family could be evicted.

His wife wasn’t sure they could afford it, he said. She was probably right.

It was supposed to be better here," he said. "Then we find out it’s almost like Mississippi. You just couldn’t get anywhere."

A reporter for the New World, as the archdiocesan newspaper was known in 1968, wrote about the group’s fight and what Macnamara called the "race tax" that black homeowners were forced to pay.

At the beginning, volunteers would go with homeowners to visit the offices of the contract sellers and ask them to renegotiate. When the sellers refused, the league would try to put pressure on them by picketing their offices and distributing flyers in the neighborhoods where they lived.

When that didn’t work, the group came together and organized a payment strike. Each family would make out a money order to themselves for the amount of their payment every month and take it to the league office, which would lock them all in a safety deposit box, as a sign that they could pay, and would, if their contracts were renegotiated.

Macnamara said he made the point at meetings that this strategy carried a risk that families would lose their homes.

"They said it didn’t matter, because they didn’t really have anything to lose," he said.

Ross has a different recollection.

"My wife said it was a mistake," he said. "She said they could throw us out. I said not to worry, that wouldn’t happen. I lied. It could have happened."

It did happen to Ross’ brother-in-law, he said. Sometimes evictions were stymied when neighbors occupied the house, or simply carried a family’s furnishings back inside after sheriff’s deputies carted them to the curb, but that wasn’t always the case. A group of homeowners all dealing with the same developer on the South Side were evicted, but the process took so long that they had saved up enough in money orders to buy better houses, Macnamara said.

But 450 families, including Ross’, did get their contracts renegotiated, saving an average of $13,500 over the lives of their loans.

To read Part 2 of this series, click here.