As the foreclosure crisis sweeps the area, blacks and Latinos have been particularly hard hit, according to an article in the NY Times. In fact, in 85 percent of the hardest-hit neighborhoods, the majority of homeowners are black or Latino. The most jarring statistic in the article was that middle class black households were five times as likely to have a subprime mortgage than whites earning similar annual incomes of $68,000 and higher. When The Times visited a stretch of Bainbridge Street in Bed Stuy (photo), it found anecdotally that a number of middle-class black professionals were paying interest rates of nine to 11 percent on their mortgages. One explanation given is a historic mistreatment by, and ensuing mistrust of, mainstream banks by the black community; another, of course, is the targeting of black customers by the most predatorial providers of sub-prime financing. “I don’t want to say it’s in the cultural DNA, but a lot of us who are older than 30 have some memory of disappointment or humiliation related to banks,” said Colvin Grannum, president of the Bedford-Stuyvesant Restoration Corporation. “The white guy in the suit with the same income gets a loan and you don’t? So you turn to local brokers, even if they don’t offer the best rates.” Another counter-intuitive fact: Middle-class blacks were more likely than lower-income blacks to have subprime mortgages. The hypothesized reason? The lower-income earners had access to, and took advantage of, community resources (free classes, etc.) to educate themselves. Still, the efforts to make the dream of home ownership more readily available to minorities that began under President Clinton in the 1990s has certainly had some dire unintended consequences. “Rather than helping to narrow the wealth and home ownership gap between black and white,” Mr. Grannum said, “we’ve managed in the last few years to strip a lot of equity out of black neighborhoods.”
Minorities Affected Most as New York Foreclosures Rise [NY Times]
Photo by kenf225
