Mortgage Crisis, Foreclosures, and Punjabi Sikhs

Co-Blogged By Camille and Phulkari

The National Context: Subprime Markets & Immigrant Communities
It’s hard to read the economic news these days without coverage of two big issues — the subprime mortgage crisis and a looming recession. mortgagecrisis.jpgIn many of these stories, the narrative of the subprime mortgage crisis focuses on two issues — how banks extended credit to low-income and traditionally unbanked communities, and how these communities lacked the funds to keep up with large interest rate step ups.

Underneath the surface of this narrative, a salient aspect of this conversation is rooted in the unique ways that predatory lenders sought borrowers with very little financial training. I live in Connecticut, where nearly 2/3 of the properties facing foreclosure were refinances of pre-existing mortgages. Even more jarring is how the lack of understanding around lending terminology impacts the upward mobility of both working poor and immigrant communities. For folks who had made enough money to buy into a higher tax bracket or economic class, subprime mortgages seemed to deliver on that promise of a nice house in a nice neighborhood.


The Silent Victims: California‘s Punjabi Sikh Communities
Within the context of the Punjabi immigrant community, wealth/asset management in the U.S. can be daunting. Regulatory frameworks and highly complex financial/capital markets make simple concepts difficult to navigate, especially in states with strong lender legislation. Paired with the challenges that immigrant communities face around banking and language access, a quiet and growing number of working-class Punjabis in California are falling victim to the wave of home foreclosures.

The majority of these working-class Punjabis are first-generation immigrants who have worked long hours racking up over-time pay to pool money together to buy their first home in as short-amount of time as they could as well as those who started working, for example, in factories, retail, office labor, and driving to build the initial capital to start investing in gas stations, liquor stores, subways, and real-estate with the hope of moving to the more wealthy parts of town with better schools, nicer homes, and safer neighborhoods. Both of these groups, generally lack the in-depth language skills and knowledge to understand complex financial contracts and, many times, just sign on the dotted line because they trust their Punjabi/Punjabi Sikh real-estate agent and mortgage broker. Many times, it is these real estate agents and mortgage brokers who manipulate this cultural trust and get their clients into bad loans to increase their own commission.

According to RealtyTrac, a mortgage research firm, California cities have the most foreclosures following Detroit, Michigan (thanks for the article Jodha!). Anthony writes, Stockton ranked second, Riverside ranked fourth, Sacramento was fifth, Bakersfield seventh, Fresno 14th, and Oakland ranked 16th. Interestingly, five of those cities (Stockton, Riverside, Sacramento, Bakersfield, and Fresno) are known to have large and growing populations of Punjabi Sikhs who may also be losing their homes due to foreclosures (it’s hard to find any stats. If you have any, please share). Furthermore, the communal belief, that if you cant pay your bills on time then its your fault you did not realistically think meri jhaeb kidhee badhi hai (how big is my pocket) and purchased beyond your means to just show-off, creates the stigma of failure and fault. It is this stigma that causes Punjabis Sikhs to become self-conscious of their situations and not reach out for help. They may just quietly be loosing their homes because of deep guilt rooted in lack of knowledge of financial contracts and language skills, rather than their failure to manage money and work hard to pay their payments.

Strategies/Next Steps
The high rates of foreclosures in California coupled with the Punjabi/Punjabi-Sikh communitys beliefs about finances makes us wonder what kind of programs do we need to help address our communitys financial needs? What kinds of strategies should we think about implementing? How should we implement?

How does our communitys desire to self-deflect failure by thinking it must be the Blacks and Latinos who are losing their homes, not us feed into the silence and impact possible solutions?

How do we balance the fine-line between mismanagement of finances and lack of knowledge when looking for solutions?

Lastly, the Treasury is rolling out a new program called Project Lifeline to slow down foreclosures and create a time period within which borrowers can renegotiate their loan terms. What kind of impact do you think this program will have on the Punjabi/Punjabi-Sikh community?

Please feel free to share stories about similar financial issues and how you think they could have been prevented.


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19 Responses to “Mortgage Crisis, Foreclosures, and Punjabi Sikhs”

  1. Sue Massey says:

    I found your site on google blog search and read a few of your other posts. Keep up the good work. Just added your RSS feed to my feed reader. Look forward to reading more from you.

    – Sue.

  2. Sue Massey says:

    I found your site on google blog search and read a few of your other posts. Keep up the good work. Just added your RSS feed to my feed reader. Look forward to reading more from you.

    – Sue.

  3. Singh says:

    purchased beyond your means to just show-off,

    Unfortunately, and by no means all the time, this is the case. From weddings to cars to the schools and degrees of our sons and daughters, living the life (or at least pretending that you do) is deeply embedded in our ethos. Keeping up with the Joneses (or rather the Johals) occurs in all Sikh Punjabi families. While by no means was this the only thing that occurred, but this trait will keep the possibility of such occurrences common.

  4. Singh says:

    purchased beyond your means to just show-off,

    Unfortunately, and by no means all the time, this is the case. From weddings to cars to the schools and degrees of our sons and daughters, living the life (or at least pretending that you do) is deeply embedded in our ethos. Keeping up with the Joneses (or rather the Johals) occurs in all Sikh Punjabi families. While by no means was this the only thing that occurred, but this trait will keep the possibility of such occurrences common.

  5. bdb says:

    I am not sure if Punjabi Sikhs are any different than all the other people who are in this crisis. The same desire to own bigger better homes and for many, their first home is what got them to sign on the dotted line. How do you then account for the follies of those people. I am also not sure how a 'community' approach can be taken for this-perhaps with the Sunday sermon at the Gurudwara-a lecture on your finances-or community education through TV/Punjabi newspapers etc.

    In the end, people are the same and Sikhs/punjabis/other indians have the same desire for material things-the very opposite of what Sikhism teaches us.

  6. bdb says:

    I am not sure if Punjabi Sikhs are any different than all the other people who are in this crisis. The same desire to own bigger better homes and for many, their first home is what got them to sign on the dotted line. How do you then account for the follies of those people. I am also not sure how a ‘community’ approach can be taken for this-perhaps with the Sunday sermon at the Gurudwara-a lecture on your finances-or community education through TV/Punjabi newspapers etc.

    In the end, people are the same and Sikhs/punjabis/other indians have the same desire for material things-the very opposite of what Sikhism teaches us.

  7. Camille says:

    From weddings to cars to the schools and degrees of our sons and daughters, living the life (or at least pretending that you do) is deeply embedded in our ethos. Keeping up with the Joneses (or rather the Johals) occurs in all Sikh Punjabi families.

    This is salient, and we've talked a bit about "keeping up with the Johals" earlier this year. This is, of course, also fundamentally at odds with most interpretations of Sikhi, particularly around greed, ego, and attachment. Are we enabling a kind of hyper-consumerism and materialism? I've found this varies by generation, as well. My grandparents, who lived through the Great Depression, Independence, Partition, and Stagflation are very risk-averse and financially conservative (as are my parents, to an extent). However, "younger" immigrant cohorts (both by age and period of migration) seem to be committed to the same materialism that drives most of the U.S. What's this about?

    bdb, while the some of the underlying factors fueling Punjabi Sikh mortgage foreclosures are probably the same as other communities, do you feel that there are any unique or difficult issues we face as a largely immigrant community? I worry that language access, lack of familiarity with American banking, and this sense of community-shame are keeping people from seeking much-needed help throughout this. I don't think a "sermon" at Gurdwara is enough — is there any kind of immigrant outreach/direct service that could help identify at-risk homeowners? These same fears and sense of shame are certainly echoed in other ethnic/racial communities.

  8. Camille says:

    From weddings to cars to the schools and degrees of our sons and daughters, living the life (or at least pretending that you do) is deeply embedded in our ethos. Keeping up with the Joneses (or rather the Johals) occurs in all Sikh Punjabi families.

    This is salient, and we’ve talked a bit about “keeping up with the Johals” earlier this year. This is, of course, also fundamentally at odds with most interpretations of Sikhi, particularly around greed, ego, and attachment. Are we enabling a kind of hyper-consumerism and materialism? I’ve found this varies by generation, as well. My grandparents, who lived through the Great Depression, Independence, Partition, and Stagflation are very risk-averse and financially conservative (as are my parents, to an extent). However, “younger” immigrant cohorts (both by age and period of migration) seem to be committed to the same materialism that drives most of the U.S. What’s this about?

    bdb, while the some of the underlying factors fueling Punjabi Sikh mortgage foreclosures are probably the same as other communities, do you feel that there are any unique or difficult issues we face as a largely immigrant community? I worry that language access, lack of familiarity with American banking, and this sense of community-shame are keeping people from seeking much-needed help throughout this. I don’t think a “sermon” at Gurdwara is enough — is there any kind of immigrant outreach/direct service that could help identify at-risk homeowners? These same fears and sense of shame are certainly echoed in other ethnic/racial communities.

  9. Manjit Singh says:

    is there any kind of immigrant outreach/direct service that could help identify at-risk homeowners?

    THE ANSWER IS "HAPPY-HEALTHY-HOLY WAY OF SIKH LIVING" AND "KNOWLEDGE IS POWER" AND THESE DAYS ONE CAN LEARN A LOT FOR FREE FROM INTERNET ABOUT FINANCES, MONEY ETC. BUT MOST IMPORTANT WEBSITE FOR SIKHS SHOULD BE "WWW.SRIGRANTH.ORG" AND THEN SIKHNET AND OTHERS. PUNJABIS HAVE A LOT OF EGO PROBLEM, BE IT IN MONEY, CARS, ROUGH AND TOUGH, HOUSES ETC. AND AS A RESULT, THIS EGO COMES IN THE WAY OF LEARNING ABOUT IMPORTANT LIFE LESSONS LIKE LIVING HEALTHY AND BALANCED LIVING WITHIN ONE'S MEANS. HAPPY-HEALTHY-HOLY!

  10. Manjit Singh says:

    is there any kind of immigrant outreach/direct service that could help identify at-risk homeowners?

    THE ANSWER IS “HAPPY-HEALTHY-HOLY WAY OF SIKH LIVING” AND “KNOWLEDGE IS POWER” AND THESE DAYS ONE CAN LEARN A LOT FOR FREE FROM INTERNET ABOUT FINANCES, MONEY ETC. BUT MOST IMPORTANT WEBSITE FOR SIKHS SHOULD BE “WWW.SRIGRANTH.ORG” AND THEN SIKHNET AND OTHERS. PUNJABIS HAVE A LOT OF EGO PROBLEM, BE IT IN MONEY, CARS, ROUGH AND TOUGH, HOUSES ETC. AND AS A RESULT, THIS EGO COMES IN THE WAY OF LEARNING ABOUT IMPORTANT LIFE LESSONS LIKE LIVING HEALTHY AND BALANCED LIVING WITHIN ONE’S MEANS. HAPPY-HEALTHY-HOLY!

  11. Mewa Singh says:

    Manjit Singh,

    Can you please refrain from writing in ALL CAPS!

    Thank you.

  12. Mewa Singh says:

    Manjit Singh,

    Can you please refrain from writing in ALL CAPS!
    Thank you.

  13. Gill says:

    Important factors to buy a home or any investment:

    – Determine your need: How big/small a house, cheap/expensive, what location, joint family/individual, other facors to consider…

    – Affordability: Your present/future income, production and resources

    – Risk factors: The art of learning to survive in bad market conditions on a short range,but real estate will add to assets on the long range (lack of affordability, if interest rates may go up, be prepared for worst conditions before you sign a loan or purchase)

    – Art of negotiations: (Best values, best deals, best options,…)

    – Prepare for unknown future conditions to avoid foreclosure…

    – Market conditions: No body has a control on the future market conditions, but learn the art of buying low and selling high (for example if you can buy now when others are foreclosing, it is a high probability that you will make money on these deals…)

    – Combine your resources with others you can trust (can you make money with your loan? or will work whole life to pay interest?)

    – Be Master of your own fortune, be smart, make smart moves, learn to love and cooperate with your families and other Sikhs (like Jews)

    – Be realistic,honest, work hard (God helps those who help themselves). As a Sikh you must help others (family, relatives, friends, and others you care, including yourself…)

    With God's blessing, I have succeeded and made money in real estate in any market conditions while "taken risk and made mistakes". As a farmer's son, I learned step by step (still learning more), and used common sense to avoid mistakes if possible. Think before you jump too high, you may fall unexpectedly and break your leg or arm…

    Finding "right information", and to know "facts" from the sources you can trust before making any decisions are the key factors. Somebody's "loss" is another's "gain", and it can be circumstantial or lack of knoweldge/information(true for any market conditions)…

    Best regard

  14. Gill says:

    Important factors to buy a home or any investment:
    – Determine your need: How big/small a house, cheap/expensive, what location, joint family/individual, other facors to consider…
    – Affordability: Your present/future income, production and resources
    – Risk factors: The art of learning to survive in bad market conditions on a short range,but real estate will add to assets on the long range (lack of affordability, if interest rates may go up, be prepared for worst conditions before you sign a loan or purchase)
    – Art of negotiations: (Best values, best deals, best options,…)
    – Prepare for unknown future conditions to avoid foreclosure…
    – Market conditions: No body has a control on the future market conditions, but learn the art of buying low and selling high (for example if you can buy now when others are foreclosing, it is a high probability that you will make money on these deals…)
    – Combine your resources with others you can trust (can you make money with your loan? or will work whole life to pay interest?)
    – Be Master of your own fortune, be smart, make smart moves, learn to love and cooperate with your families and other Sikhs (like Jews)
    – Be realistic,honest, work hard (God helps those who help themselves). As a Sikh you must help others (family, relatives, friends, and others you care, including yourself…)

    With God’s blessing, I have succeeded and made money in real estate in any market conditions while “taken risk and made mistakes”. As a farmer’s son, I learned step by step (still learning more), and used common sense to avoid mistakes if possible. Think before you jump too high, you may fall unexpectedly and break your leg or arm…
    Finding “right information”, and to know “facts” from the sources you can trust before making any decisions are the key factors. Somebody’s “loss” is another’s “gain”, and it can be circumstantial or lack of knoweldge/information(true for any market conditions)…
    Best regard

  15. Kaur says:

    Seeing that within our community there are many professionals that deal with the details of real estate and financing would it be a possibility to solicit this information at a local level?

    Just as Gill Bhaji has pointed out some very important factors to pay attention to, would it be possible to coordinate some sort of 'workshop' on these details. Possibly through the gurdwaras/sikh centers/local sangat?

    Both of these groups, generally lack the in-depth language skills and knowledge to understand complex financial contracts and, many times, just sign on the dotted line because they trust their Punjabi/Punjabi Sikh real-estate agent and mortgage broker. Many times, it is these real estate agents and mortgage brokers who manipulate this cultural trust and get their clients into bad loans to increase their own commission.

    If this is something we are acknowledging as a fact in the community, I think it is also our responsibility (within means) to respond to this. Since we know that language is a major barrier, and we also know that it is rare for individuals and families to come openly to the community for help we should try to at least provide the general information for the community.

    This could be a simple tri-fold pamphlet/flier written in Punjabi that provides basic information, that way it is easily accessible and those individuals that do not wish to divulge the details of their private finances do not need to in order to be more aware. Or even a short presentation at the gurdwara, something to communicate unbiased information.

    I feel like this is one of those opportunities to actually use the many degrees and qualifications some of us walk around with to give back to the community. Just a suggestion, what do you guys think? Is it something that is possible?

  16. Kaur says:

    Seeing that within our community there are many professionals that deal with the details of real estate and financing would it be a possibility to solicit this information at a local level?

    Just as Gill Bhaji has pointed out some very important factors to pay attention to, would it be possible to coordinate some sort of ‘workshop’ on these details. Possibly through the gurdwaras/sikh centers/local sangat?

    Both of these groups, generally lack the in-depth language skills and knowledge to understand complex financial contracts and, many times, just sign on the dotted line because they trust their Punjabi/Punjabi Sikh real-estate agent and mortgage broker. Many times, it is these real estate agents and mortgage brokers who manipulate this cultural trust and get their clients into bad loans to increase their own commission.

    If this is something we are acknowledging as a fact in the community, I think it is also our responsibility (within means) to respond to this. Since we know that language is a major barrier, and we also know that it is rare for individuals and families to come openly to the community for help we should try to at least provide the general information for the community.

    This could be a simple tri-fold pamphlet/flier written in Punjabi that provides basic information, that way it is easily accessible and those individuals that do not wish to divulge the details of their private finances do not need to in order to be more aware. Or even a short presentation at the gurdwara, something to communicate unbiased information.

    I feel like this is one of those opportunities to actually use the many degrees and qualifications some of us walk around with to give back to the community. Just a suggestion, what do you guys think? Is it something that is possible?

  17. Wow, what an wonderful post! I saw your blog today, this is a really excellent post you made, hope to see more from you!

  18. Wow, what an wonderful post! I saw your blog today, this is a really excellent post you made, hope to see more from you!