October 17, 2012

Two faculty members discuss the existence of the American Dream

Professors Raffaele Di Cecca and Joseph Schellings

Although the two speakers at yesterday’s Distinguished Faculty lecture on “the American Dream” hailed from distinct departments, their insights overlapped. Both business management professor Joseph Schellings and science professor Raffaele Di Cecca focused on a different aspect of the historic notion: home ownership.

Addressing an audience of about 20 faculty, staff, and students, in Beatty 426, Di Cecca argued that the dream of homeownership was still attainable, while Schellings posed that home ownership no longer seemed to be a critical part of the American Dream.

“Is homeownership ‘the American Dream’ of today’s generation in the same sense as it was for my generation and my parents’ and grandparents’ generation?” Schellings said. “I would answer that question with an emphatic, no!”

Schellings tracked the history of home ownership in the U.S. Initially, it was more of an immigrant’s dream, and later on, in the 19th century, buoyed by popular notions like Manifest Destiny and the 1862 Homestead Act, Americans came to identify themselves as property owners.  

But more recently, Schellings explained, the influx of subprime mortgages and the housing crash left people with homes worth less than their mortgages. As Schellings said, “the dream of American homeownership” has actualized, for many, into an “American nightmare.”

Next, professor Di Cecca approached the podium to demonstrate a series of calculations he has used to achieve his own version of the American dream, owning multiple homes, including one on the Cape and one in South Boston.

In his lecture entitled “The Anatomy of a Mortgage,” Di Cecca proposed using a formula to help people maximize their mortgage payments to ultimately reduce the overall cost of the loan. Members from the audience, some who also own property, shared stories about dealing with banks and warned of the pitfalls, including a cancellation fee from taking your mortgage from one bank to another.

Di Cecca agreed and encouraged people to negotiate a better rate with their banks first and shop around if necessary. Looking up at the projected image of his home’s garden behind him, Di Cecca appeared pleased to have found a formula for attaining his ownership dream – one of hard work and calculated investing.

“Everything is attainable,” Di Cecca said. “But it takes a lot of hard work.”

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