New Report Shows the Demographic Disparity of the Mortgage Crisis
June 21, 2010 - Posted by The Leadership Conference
Blacks and Latinos are facing greater risks of losing of their homes as the foreclosure crisis continues, according to new research by the Center for Responsible Lending (CRL).
In "Foreclosures by Race and Ethnicity: The Demographics of a Crisis," CRL reports that while Whites are in danger of losing their homes at a rate of 14.8 percent, Blacks and Latinos are losing their homes at rates of 21.6 percent and 21.4 percent, respectively.
"The findings in this report describe the devastating impact that the casino culture of Wall Street and the mortgage industry is having on communities of color," said Wade Henderson, president and CEO of the Leadership Conference "Instead of owning a piece of the American dream, these hardworking families have borne the brunt of an anything-goes regulatory system that has turned a blind eye toward predatory lending and the needs of vulnerable consumers, who may never recover the wealth they have lost."
Since 2007, two and a half million homes have been lost to foreclosure. According to data from the Mortgage Bankers Association's National Delinquency Survey, the foreclosure crisis is far from over. As CRL notes, analysts suggest that by the time foreclosures subside, ten to thirteen million homes will have been lost.
CRL has given three recommendations in their report to quell this crisis and prevent a future mortgage crisis of this magnitude:
- Mortgage providers should be required work to alleviate losses and give bankruptcy judges authority to modify mortgages.
- Any new policy should account for the demographic disparities of the foreclosure crisis.
- Keep in place the current homeownership policies for disadvantaged communities once new policies are made.