Approximately 1.3 million Latino homeowners are expected to lose their homes to foreclosure between 2009 and 2012. As many as eight million Americans were behind on their mortgage payments last year. With numbers this large, it's easy to lose sight of their full meaning. However, when the National Council of La Raza (NCLR) and the Center for Community Capital (CCC) partnered to take an in-depth look into families' fractured households, we saw just how devastating the crisis has become.
NCLR and CCC followed the stories of 25 parents and children who had experienced foreclosure. We found that foreclosures create a perfect storm where a number of issues known to be bad for kids collide under one roof. Interviews with affected families showed that children of foreclosure were at high risk of becoming children of divorce and declining grades. Parents' relationships with their children are frequently mired in guilt and anxiety.
With their emergency reserves zapped and home equity gone, many of those interviewed were forced to alter their long-term financial game plan. They are unlikely to contribute to their children's future financial stability in ways parents usually want to, such as helping with a home or car purchase or college bills. The retirement horizon is no longer visible for many. Some are even putting off medical care to save money. These families have become the foreclosure generation.
Today, NCLR and CCC released their findings in the report, The Foreclosure Generation: The Long-Term Impact of the Housing Crisis on Latino Children and Families, which examines how families will fare after losing their home and financial security. Many will be driven off the path to prosperity that they have worked so hard to stay on. The subprime lending and housing crises are expected to result in the loss of as much as $98 billion in collective Latino household wealth, a devastating figure given that Latinos and their children will be a major force in the growth of U.S. population over the next few decades. Read more about the report from The Washington Post here.
NCLR and CCC released their report today to mark the one-year anniversary of the Home Affordable Stability Plan's launch. We hope these findings can impress on the administration and Congress just how important a bold response is to coping with the crisis. It demands decisive steps that prevent further erosion of familial, social, and financial stability in communities throughout the country. To help, please cast your vote for affordable housing.