Latino and Black home owners are more than 70 percent more likely to lose their homes to foreclosure than their white counterparts. That alarming statistic was released in a new report from the Center for Responsible Lending that looked at how the home foreclosure crisis is impacting minority communities disproportionately.
According to the report, a black family is 76 percent more likely, and a Latino family is 71 percent more likely, to lose their home to foreclosure than a white family. The statistics get even worse at the higher bracket income levels.
High-income African Americans were 81 percent more likely and Latinos 94 percent more likely to face foreclosure than whites in similar income brackets.
“Analysis suggests dramatic differences in how the foreclosure crisis has affected racial and ethnic groups,” says the report. “African-American and Latino borrowers have borne and will continue to disproportionately bear the burden of foreclosures.”
A number of factors could explain the extreme disparities including minorities being more likely to receive subprime loans during the height of the housing boom even when they had similar credit scores to white borrowers. Higher rates lead to higher monthly payments and quicker defaults and foreclosures.
The higher unemployment rate in the minority communities may also exasperate the problem. Unfortunately, experts do not expect a reversal of these trends any time soon.
To read the full report, go to: http://www.responsiblelending.org/mortgage-lending/research-analysis/foreclosures-by-race-and-ethnicity.html
I read the full report and appreciate that La Plaza is spreading such sound, but terribly sad, information into the community. The Right Wing has been trying to blame the crisis on attempts to provide affordable housing to low income minorites, and I was inmpressed with the statistics regarding income levels and several decades of minority lending.
I have many friends who have been affected by loan-marketing strategies to minorities. Having worked in the mortgage industry–for a very honest broker–I became aware of the kinds of products sold by Spanish-speaking sales people, especially ARMs sold to people with good jobs and good credit, and who are 1st time buyers. They could have easily qualified for many good 1st time buyer programs, but no, now they have to suffer the consequences of corporate profit strategies.
I had to disagree with one of the conclusions of the report, regarding brokers. Much of the problem has been blamed on them, but all the people I know were deceived right in the offices of major lenders. Especially the predatory lenders named in recent legal proceedings in several states. It’s a shame that many minority people–and others–continue to hold bank accounts and give business to the same banks that have so damaged their communities.
Brokers are like independent insurance agents. They offer the borrower the chance to shop among products and lenders to find what fits them the best. I believe the abuses in the industry were pervasive and still are. Brokers are being subjected to all sorts of fees and regulation, while major institutions freely continue to play the same fast and loose games, to the detriment of the nation and the world.