Most Americans are aware of the devastating condition the United States economy is confronting. Although it is less obvious to those who are employed, for the millions who are unemployed, under employed and struggling to provide for their families, it is a palpable reality faced each and every day. This is particularly true with respect to the rash of home foreclosures occurring at unprecedented rates.
The housing crisis is one of the largest factors plaguing the economy. Across the nation, homeowners have lost more than $7 trillion in aggregated value over the past five years alone. In addition, upwards of four million Americans are either behind on their payments or in foreclosure, with an additional 25 percent of U.S. homeowners being underwater on their mortgage. A new report just released indicates that these conditions are even worse for African American home owners.
The report, issued by the Center on Responsible Lending, not only notes that the foreclosure crisis isn’t finished yet but that the crisis is disproportionately affected minorities. The proportion of African American and Latinos impacted is two times that of Whites. Their finding indicate that
Twenty five percent of all Latino and African American borrowers have lost their home to foreclosure or are seriously delinquent, compared to almost 12 percent for white borrowers. This observation is more problematic in many major metropolitan areas.
The report points to how large Wall Street banks, mortgage companies and other financial entities took advantage of consumers acknowledging that that the lending practices were often predatory when targeting minorities.
Data supports this assertion since banks that were bailed-out were determined to have steered substantial numbers of minorities who qualified for prime loans into higher priced subprime loans. Doing such served the profit margins and ledgers of banks which often added in excess of $100,000 in interest payments over the life of the loans. Specifically 41.5 percent of African Americans were given higher-priced loans by large banks, compared to just 17.8 percent of white borrowers.
President Obama has openly stated that he desires to reform the banking industry such that these practices do not occur and continue to prey on the historically disenfranchised communities like minorities. However, he has yet to deal with this problem and seems to have forgotten about what many deal with continuously.
This report as well as the actions of the financial industry in their role in the housing and economic crisis suggests that the newly created Consumer Financial Protection Bureau place greater resources into this problem. Yes, discriminatory lending is illegal, and yet for years, the banks have largely been able to get away with it. Obama needs to act and stop talking for the financial Protection Bureau needs to go back about ten years, and prosecute every bank and bank employee that participated in predatory lending to anyone, including blacks and Latinos and put them where they belong, in prison for as long as possible. –torrance stephens, ph.d.
Torrance Stephen authors the blog http://rawdawgb.blogspot.com/, follow him on twitter https://twitter.com/rawdawgbuffalo.