According to Harvard University's Joint Center for Housing Studies "The State of the Nation's Housing 2009," minorities have been affected by the Real Estate downturn disproportionally to the general population. According to the study, the incidence of high-cost loans and foreclosures is much higher in minority neighborhoods than in white neighborhoods and highest in low-income minority neighborhoods. High-cost subprime "loans and foreclosures are heavily concentrated in low-income minority neighborhoods. (The U.S. Department of Housing and Urban Development) estimates that the median share of high-cost loans issued from 2004-06 in low-income minority census tracts was nearly one-half while the median share in low-income white neighborhoods was one-third, and the median foreclosure rate from January 2007 through June 2008 was 8.4 percent in low-income minority neighborhoods -- significantly higher than the 6.3 percent in low-income white neighborhoods Home price declines have hit minority households especially hard. Even before the recession began, the share of minority homeowners with equity cushions of less than 5 percent of the home's value was twice as high as that of whites (6.9 percent versus 3.4 percent). Because minorities are more likely to live in neighborhoods with heavy foreclosures (where prices have dropped the most), a large share of these households has seen the value of their homes fall below the amount they owe on their mortgages. This Week's Real Estate Insight: It is appalling that some unscrupulous practitioners took advantage of so many people; the shocking statistics clearly suggest that minorities were targeted for sub-prime loans that they were not prepared to deal with. The real tragedy is most of this treachery was carried out by people who "spoke their language, and understood their values."Study Shows Minorities Targeted for Sub-Prime Loans
- By Michael McCann
- Posted
According to Harvard University's Joint Center for Housing Studies "The State of the Nation's Housing 2009," minorities have been affected by the Real Estate downturn disproportionally to the general population. According to the study, the incidence of high-cost loans and foreclosures is much higher in minority neighborhoods than in white neighborhoods and highest in low-income minority neighborhoods. High-cost subprime "loans and foreclosures are heavily concentrated in low-income minority neighborhoods. (The U.S. Department of Housing and Urban Development) estimates that the median share of high-cost loans issued from 2004-06 in low-income minority census tracts was nearly one-half while the median share in low-income white neighborhoods was one-third, and the median foreclosure rate from January 2007 through June 2008 was 8.4 percent in low-income minority neighborhoods -- significantly higher than the 6.3 percent in low-income white neighborhoods Home price declines have hit minority households especially hard. Even before the recession began, the share of minority homeowners with equity cushions of less than 5 percent of the home's value was twice as high as that of whites (6.9 percent versus 3.4 percent). Because minorities are more likely to live in neighborhoods with heavy foreclosures (where prices have dropped the most), a large share of these households has seen the value of their homes fall below the amount they owe on their mortgages. This Week's Real Estate Insight: It is appalling that some unscrupulous practitioners took advantage of so many people; the shocking statistics clearly suggest that minorities were targeted for sub-prime loans that they were not prepared to deal with. The real tragedy is most of this treachery was carried out by people who "spoke their language, and understood their values."
