“I think some of my professors would be surprised to know that my theological education gave me the skills to be successful on Wall Street!” said Steve Peterson ‘84 M.Div. with a bit of a laugh. Peterson, who studied theology at Yale Divinity School, has built a career in bond markets, but after leaving a billion-dollar bond fund, he has turned his expertise toward addressing social crises. He is using financial markets to create social change, with his theology at his core.
A member of the YDS Board of Advisors, Peterson holds an MBA but credits his teachers at Yale, and the University of Chicago where he obtained his PhD. in early modern theology and philosophy with helping him to develop the critical and creative thinking skills required to navigate the world of finance.
For many years, he ran high-yield bond funds for Allstate and Nuveen Investments. When he left a few years ago, the depth of the housing and mortgage crisis was just starting to become apparent. Homeowners were still reeling from the 2008 financial crash.
In some states, where mortgage default is an administrative process, the crisis had been painful but swift. In states where mortgage defaults required lengthy judicial mediation, homeowners were mired in spiraling debt and crisis, made worse in the drawn out process.
Federal, state, and city assistance programs largely served as a back-door subsidy for banks, and yielded minimal mortgage adjustments that helped a few homeowners. But many were still saddled with enormous, unmanageable debts many times the current value of their homes, with little hope of ever recovering.
In response to this crisis, Peterson co-founded American Homeowner Preservation Fund in 2011 to help distressed homeowners restructure their debt.
The partnership created an innovative socially responsible fund that purchased pools of home loans that were in default at five to ten cents on the dollar. These transactions allowed the fund to forgive significant amounts of individual debt, and offer homeowners options to cash out, lower their monthly payments—often to levels below prevailing rents, or settle mortgages.
For Peterson, this work is a moral imperative. The economic havoc created by predatory lenders, incompetent regulators, and political drive to promote homeownership is not merely investment losses, the consequences are devastating people’s whole lives. “One of the things that was compelling about this is that we [could] do more than talk about this crisis. We can change people’s lives.”
He tells some disturbing stories of owners with hundred-thousand dollar debts on homes worth a fraction of what they paid. Most of them have few legal or financial resources; their mortgages have been bought and sold so many times, they are left completely lost. “There are so many layers to how people [in foreclosure] are connected to their homes,” Steve explains. “They are humiliated or embarrassed. They live in fear that the sheriff will come to evict, or wonder where their kids will go to school. The distress and confusion is significant.”
Each rescued mortgage becomes a very personal story. Because of the AHP fund, he can also tell about the retired schoolteacher who was able to begin rebuilding her life; or the woman who had been left penniless by a former spouse and was able to lower her payments to less than prevailing rent, and stay in her house on a Wal-Mart income.
It is at this human level that Steve puts his theological background to work to envision what people of faith and churches should be doing about this crisis. He says, “If your theology doesn’t lead you to make a difference in someone’s life, then you need to do some more homework. What you should be doing as a pastor or priest, or banker or investor is changing the world.”
Three single family homes developed by Beulah Land Development Corporation on Orchard Street, on the same block as Beulah Heights Pentecostal Church. The homes have increased in value significantly as the community has developed, providing long-term stability for the owners and neighbors. (Photo courtesy Steven Maasbach) |
Steven Maasbach ‘15 M.Div., a current student is also leveraging his time in the real estate sector toward addressing housing issues.
Last year he was awarded a Yale University President’s Public Service Fellowship and was placed at Beulah Land Development Corporation, a non-profit with a mission to revitalize New Haven’s Dixwell community. BLDC was created by Bishop Ted Brooks to help stabilize the neighborhood surrounding his church, Beulah Heights First Pentecostal. Beulah began by buying up and rehabilitating blighted homes along Orchard Street, and placing low- and moderate-income families.
Many homes in the Dixwell community were purchased by opportunistic landlords who never realized gains from their investments. Many are now underwater and owe much more than the homes are worth. Some have renters, but others are simply left abandoned. Beulah offers these absent owners a chance to cash out, and the chance for the neighborhood to reclaim stable owner-occupied housing.
Maasbach completed a 10-week fellowship last summer at Beulah, and for his expertise, was asked to continue on staff to help develop larger projects. And, he is wasting no time in applying his skills to development of new affordable multi-family housing and a commercial project.
Like Peterson’s project, this entrepreneurial approach to community development is focused on sustainable solutions to the housing crisis. Beulah offers homeownership counseling, helping to educate new buyers about ownership. Each buyer commits to live in the home for 7-10 years, effectively serving as an anchor to the community.
As a result of the program, Beulah reports that none of its projects have experienced foreclosure.
As Maasbach has immersed himself in the Beulah projects and the Dixwell community, his theological education is coming into focus. “I felt called to divinity school, but without Beulah I would question my purpose here.” He credits his coursework with helping create a framework for engaging theologically with New Haven churches and local coalitions on issues of gang violence, drugs, and poverty that affect the Dixwell neighborhood.
Steven Maasbach and Beulah are doing the kind of innovative and entrepreneurial work that Steven Peterson thinks more churches and clergy should be doing. He says being a good church leader is not just being intellectually clever; we need more leaders like Dorothy Day or Mohammad Yunus. “Leaders like Day or Yunus do not just offer ideas, but they learn how to build up organizations to do remarkable things.”
The church has not done enough preaching about unhealthy attitudes toward debt and consumption. For some Americans, Peterson explains, “Homeownership has become another kind of consumption.”
“Two of the most common themes in scripture are money and idolatry, and churches need to talk about that.” He says, “Preaching about justice is often a little too thin,” without addressing these topics.
Peterson wants to find ways to help churches figure out how to unleash the creativity of their congregations to create social changes. Many churches have untapped talent and passion, the hard work is learning how to lead in an instructive way. “Churches must be willing to experiment and learn how to fail more fruitfully,” he says. In other words, if churches want to succeed, they have to be willing to experiment, willing to fail, and willing to learn.
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