African Americans to Experience Greatest Loss of Wealth in Modern U.S. History

[Junkdrawer]

Report: Subprime Mortgage Crisis Causing African Americans to Experience Greatest Loss of Wealth in Modern U.S. History

A startling new report has predicted the subprime mortgage crisis will cause people of color to lose up to $213 billion, leading to the greatest loss of wealth in modern U.S. history. The figure appears in a new report from United for a Fair Economy called “Foreclosed: The State of the Dream 2008.” The group accuses mortgage lenders of deliberately targeting the poor and people of color with high-cost loans. We speak with Dedrick Muhammad, co-author of the report.

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JUAN GONZALEZ: Now, the City of Baltimore recently filed a lawsuit related to some of this discrimination, didn’t they?


DEDRICK MUHAMMAD: Yes. Yes, sir. Yes, Juan. We had been in some contact actually with Mayor Dixon’s office, and what we’re seeing is that cities—and we’re going to see that states—around the country are going to realize what a dramatic effect it’s going to have on their areas, as well, because with the decrease in home value that is part of this subprime crisis, the subprime crisis is going to lead to mass foreclosures in many areas—Baltimore, D.C., in Michigan, as well, Nevada. It’s one of the—Las Vegas is one of the highest foreclosure rates. It’s bringing down the prices of homes substantially. And what that means is that property taxes are going down, so now cities and states are going to have less revenue to provide services to the people of those areas.


AMY GOODMAN: Cleveland, the mayor there also has filed suit.


DEDRICK MUHAMMAD: Oh, that’s absolutely right. And as I said, it’s going to be a national issue. And we’re already seeing some of the presidential candidates start talking about this issue. But what I haven’t heard them talk enough about is what type of policies are they going to do to support wealth-building for middle-income, working-class Americans, because over the last thirty, forty years, we’ve had policies that have really showered wealth upon the already-wealthy and have left the middle class and working class with stagnant wages and skyrocketing costs, like homeownership, like healthcare. And the middle class and working class have been looking for some way to try to cover those costs, and too many have been talked into refinancing their homes, refinancing their cars, into loans which they cannot afford, so they end up losing their homes, losing their cars and being in a worse economic situation than they were before they even started this process.

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http://www.democracynow.org/2008/1/17/report_subprime_mortgage_crisis_causing_african

Which means millage rates will be going up for everyone....which means more will default...which means millage rates ...

You get the picture.

[flashl]

1. Subprime in Black and White

Subprime in Black and White

Evidence is mounting that during the housing boom, black and Hispanic borrowers were far more likely to be steered into high-cost subprime loans than other borrowers, even after controlling for factors such as income, loan size and property location.

The Furman Center for Real Estate and Urban Policy at New York University released a study this week highlighting a disturbing pattern of racial disparities. Using data gathered by the federal government, the study showed that the 10 New York City neighborhoods with the highest rates of subprime lending in 2005 had black and Hispanic majorities, while the 10 areas with the lowest rates were mainly non-Hispanic white. The higher incidence of subprime lending to borrowers of color held up even when the median income levels of the neighborhoods were comparable.

NY Times