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Minority Borrowers Disproportionately Damaged by Foreclosure Crisis

Households across the nation have been negatively impacted by the foreclosure crisis, but African-American[IMAGE]

and Latino families have been hit the hardest, according to a report recently released by the ""Center for Responsible Lending"":http://www.responsiblelending.org/ (CRL).

The report - ""Foreclosures by Race and Ethnicity: The Demographics of a Crisis"":http://www.responsiblelending.org/mortgage-lending/research-analysis/foreclosures-by-race-and-ethnicity.pdf - found that while the majority of families who have lost their homes are non-Hispanic and white, African-American and Latino families have been disproportionately affected relative to their share of mortgage originations. Among recent borrowers, CRL estimates that nearly 8 percent of both African-American and Latinos have lost their homes to foreclosure, compared to 4.5 percent of whites.

These racial and ethnic patterns are likely to continue in the future, CRL said. According to the report, non-Hispanic whites represent the majority of at-risk borrowers, but African-American and Latino borrowers are more likely to be at imminent risk of foreclosure â€" which refers to the number of borrowers who are two or more payments behind on their mortgage combined with those who are


already in the foreclosure process. While 14.8 percent of non-Hispanic white borrowers are considered at ""imminent risk,"" 21.6 percent and 21.4 percent of African-American and Latino borrowers fall under this category.

When the number of homes that are in imminent danger of foreclosure is combined with homes already lost, CRL estimates that 17 percent of Latino homeowners, 11 percent of African-American homeowners, and 7 percent of white homeowners have already lost or are at imminent risk of losing their home.

The report also found that the foreclosure crisis has slashed hundreds of billions of dollars in wealth from communities of color. According to CRL, this wealth drain is the result of direct losses from foreclosures and also the decline in neighboring property values each foreclosure brings.

And things don't seem to be getting any better, as the report found that foreclosures will continue to climb and losses will continue to mount. From 2009 to 2012, CRL estimates that the indirect ""spillover"" losses resulting from the depreciation of nearby properties will drain $194 billion from African-American communities and $177 billion from Latino communities.

""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 on Civil and Human Rights."":http://www.civilrights.org/ ""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.""

About Author: Brittany Dunn


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