Senate Bill Might Evict Affordable Housing Goals
3/20/2014, 2:21 p.m.
Speaking on behalf of the National Council of LaRaza, Eric Rodriguez said, “Latinos have still not recovered from the housing crisis, which sent millions of homes into foreclosure and decimated our community’s wealth. In order to rebuild assets for Hispanic families, this legislation must, above all, ensure access to affordable credit for low-and-middle income families, which will help build stronger neighborhoods and support our national economy.”
Rodriguez’s concerns are also true for millions of Black families who, like many Hispanic ones, were targeted and sold high-cost, predatory mortgages that resulted in foreclosures and lost wealth. Earlier CRL research found that these two communities of color bore the brunt of lost family wealth during the housing crisis.
A new policy brief from the Urban Institute concludes that these racial disparities in mortgage lending are still continuing.
The Urban Institute wrote, “While all borrowers lost household equity in the Great Recession and are now feeling the crunch of tightening credit, minority borrowers may feel it most. Many of these minority borrowers received the kind of predatory mortgages now forbidden under the Dodd-Frank Act. . . .Now, strict credit standards and lowered FICO scores due to missed payments or foreclosure prevent many of these same borrows from entering the housing market despite lower prices.”
Additionally, the Institute found that:
· After 2005, the number of mortgages purchased by African-Americans and Hispanic borrowers dropped respectively by 76 and 78 percent;
· From 2005 to 2012, the drop in loans for African-Americans went from over half a million loans to 131,470;
· The decline for Hispanic consumers during these same years dropped from 986,206 to less than 250,000; and
· By comparison, loans to non-Hispanic white and Asian borrowers declined by only 56 and 59 percent.
In short, while the overall housing market continues to improve, the consumers hit hardest by the financial decline are still being left out of the recovery.
As CRL’s Calhoun has said, “With a fragile housing market, it does raise questions about whether this is the time to shake the whole thing up.”
Charlene Crowell is a communications manager with the Center for Responsible Lending. She can be reached at Charlene.email@example.com.