The foreclosure crisis has been much harder on African-Americans and Latinos, according to a new study by the Center for Responsible Lending (CRL).
"African American and Latino borrowers have borne and will continue to disproportionately bear the burden of foreclosures," asserts the CRL. Based on its estimates, nearly 8 percent of both African American and Latino borrowers have lost their homes to foreclosures, compared to 4.5 percent of white borrowers. Further, African-American and Latino borrowers are 76 percent and 71 percent more likely, respectively, than white borrowers to have lost their homes to foreclosure since housing prices started to tumble in January 2007.
From early 2007 to the end of 2009, the study estimates the completion of 2.5 million foreclosures and the origination of 6.9 million foreclosures across all races. In identifying reasons for the disparate impact of these foreclosures on communities of color, the CRL says:
"African-American and Latino borrowers were particularly vulnerable, as originators targeted traditionally underserved communities for subprime loans and steered borrowers of color to higher-cost loans. Indeed, court cases and information provided by former employees of subprime lenders describe the systematic targeting of African-American neighborhoods and other communities of color."
The study also cites previous CRL research that shows African-American and Latino borrowers to be 30 percent more likely to get higher-rate subprime loans than white borrowers with similar risk characteristics. This may be another reason why, according to the CRL, 575,000 African Americans and Latinos have lost their homes since 2007 and 1.2 million are currently two or more loan payments behind on their mortgage.
Read the report HERE:
Start your workday the right way with the news that matters most. Learn more