Latinos, Blacks More Than Half CA Foreclosures
OAKLAND, CA - Latinos and African Americans in California have experienced significantly higher foreclosure rates than non-Hispanic borrowers in the state, according to first-of-its-kind research released today by the Center for Responsible Lending.
As a result, these communities represent more than half of all foreclosures, with 48% of foreclosures on Latinos and 8% on African Americans. These borrowers were more likely to receive higher-cost subprime mortgages with loan terms that typically increased the risk of default, compared with safer loans made to similarly situated non-Hispanic white borrowers. The report, Dreams Deferred: Impacts and Characteristics of the California Foreclosure Crisis, analyzed more than 600,000 foreclosures in the state and also found that over three-quarters of all California foreclosures were on relatively modest properties, not "McMansions" as often believed. Additionally, while major cities like Los Angeles and Sacramento have suffered the greatest number of foreclosures, communities in the Central Valley and Inland Empire have been severely harmed by high concentrations of foreclosures. "Whether we are from Los Angeles or Modesto, all Californians are severely impacted by the foreclosure crisis," says Paul Leonard, director of CRL's California office. "We need solutions now that ease the pain everywhere." The CRL California office has been at the forefront of efforts to respond to the state's foreclosure crisis. CRL's latest research is the first to rigorously examine the geographic and demographic dimensions of California foreclosures as well as characteristics of foreclosed properties. The key findings are: "NCLR has sounded the alarm for the last two years about the devastating impact foreclosures have had on communities of color, but this report reveals a shocking level of concentration among Latino homeowners in California," said Janet Murguia, President and CEO of the National Council of La Raza. "Dishonest brokers peddled their high-cost loans, steered our families into risky products designed to fail and now Latinos and all of California are paying the price." The report also outlines policy recommendations to reduce unnecessary foreclosures: To read the executive summary, download the full report and view the PowerPoint presentation, can be seen HERE About the Center for Responsible Lending The Center for Responsible Lending is a nonprofit, nonpartisan research and policy organization dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices. CRL is affiliated with Self-Help, one of the nation's largest community development financial institutions.
