Saturday, June 19, 2010

Minorities hit hardest by foreclosures

In a classic example of trickle down economics, the Washington establishment bailed out the banks to save them from the foreclosure crisis.

We could have bailed out the upside down homeowner, which would have saved the excessively indebted, got the consumer to start spending again, and trickled up to the banks by satisfying their portfolios of upside down loans.

But, our "leaders" chose to reward their campaign donors rather than their voting base.

The result?

One of the most disturbing aspects of the foreclosure crisis is how much damage it has caused in minority communities. Now, the activist group Committee for Responsible Lending (CRL) has spelled out the depth of the problem in stark detail.

Research by CRL found that about 17% of Latino homeowners and 11% of African American homeowners have already lost their home to foreclosure or are at imminent risk of doing so. The percentage among non-Hispanic white borrowers is 7%.

In terms of actual foreclosures, black and Hispanic borrowers are nearly twice as likely to have already lost their homes. The data shows that for every 10,000 loans made to African Americans, 790 foreclosures were completed, compared to 769 for every 10,000 loans made to Latinos and 452 for every 10,000 loans made to whites. As a result of these home losses, $193 billion in wealth will be drained from the African American community between 2009 and 2012, while the Latino community will lose $180 billion during that same period.

Sadly, those who should be screaming the loudest are silenced by an outdated sense of ethnic and racial solidarity with their president.

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