Beginning in the early 1980s, Martin pioneered the safe extension of housing loans to low-income Americans as a way to increase wealth (not just income) and correct entrenched poverty. The set of principled lending innovations he has introduced in the three decades since starting his work have transformed the industry and the opportunities – and now protections – for low-income Americans.
The New Idea
Martin grew up in Greensboro, North Carolina, in the 1960s, a witness to racial tension and violence very close to home. Later as a young lawyer, he set about fixing these problems, focusing initially on increasing income among low wage earners in North Carolina through worker cooperatives. But looking closely, he saw that family wealth was the differentiating factor – the median white family net worth in the mid-1980s was $44,000, while for the average black family, it was $4,000. The difference was that middle- and lower-income white families could easily get a mortgage and build equity, and black families couldn’t. To overcome poverty in a systemic way, Martin saw that lending options needed to be set up to allow low-income families to – safely – buy a home and build equity across their working years. Through the Durham-based organization Self-Help, established with his wife Bonnie Wright in 1980, Martin pioneered the safe extension of housing loans to low-income families and designed mechanisms, such as the first secondary market for mortgage loans, to allow traditional banks to increase their lending to appropriate home buyers in partnership with a responsible citizen organization. Since its start, Self-Help has financed $5.6 billion to over 64,000 families, individuals, and organizations in North Carolina and across the country. In the past decade, protecting wealth and addressing industry failures and predatory practices has emerged as a priority, even as Martin and his team have diversified Self-Help’s lending products and extended its geographic reach, expanding to California in 2006. To protect against recent industry abuses and predatory practices in mortgage lending and payday loans, Martin established and leads the Center for Responsible Lending, founded in 2002, from which he is advancing a number of consumer protections and industry reforms.