The ongoing foreclosure crisis has slashed hundreds of billions of dollars in wealth from communities of color, a new CRL research report shows, as an estimated 17% of Latino homeowners and 11% of African-American homeowners have already lost their home to foreclosure or are now at imminent risk. The wealth drain is the result of direct losses from foreclosures and also the decline in neighboring property values each foreclosure brings.
The report–”Foreclosures by Race and Ethnicity: The Demographics of a Crisis,” http://www.responsiblelending.org/mortgage-lending/research-analysis/foreclosu res-by-race-and-ethnicity.html–shows that foreclosures will continue to climb and losses will continue to mount. From 2009 to 2012, those living near a foreclosed property in African-American and Latino communities will have seen their home values drop by more than $350 billion–possibly exceeding the damage the Gulf States suffered from Hurricane Katrina. And high levels of unemployment that were caused by reckless lending and the collapse of the housing and financial markets continue to exacerbate the foreclosure crisis.
“Whether we’re talking about oil spills or housing catastrophes, it’s clear that America needs to invest in prevention, clean-up and recovery,” said CRL President, Mike Calhoun. “As Congress finishes financial reform legislation, the rules on home lending need to get stronger, not weaker. We need to make sure a foreclosure crisis of this type never happens again, and, though so many homes have been lost, it’s not too late to prevent more damage.”
The percentage of homes in some stage of foreclosure in the United States is the highest on record and five times the norm, but little study has been done to quantify this trend. This report provides the most detailed estimate yet of how many foreclosures have been completed since the crisis started in 2007, how many more homes are on the brink of being lost, and how this man-made disaster has disproportionately damaged African-American and Latino communities.
