Afro-Americans And Hispanincs Will Be Absorbing Half The Nations’s Foreclosure Shock

Posted in Foreclosures, July 22nd, 2008 |

Statistical evidence shows that over half of all Black borrowers who refinance in 2006 were made to swallow sub-prime mortgages. Latino borrowers faced a similar situation. Together they will suffer a loss ranging from $164 billion to $213 billion in the surging tide of foreclosures that have been wrecking havoc since that time.

Each family has a tragic tale to tell – individual and personal that is far more damaging than figures and numbers. The agony cannot be gauged by statistics alone.
A staggering number of people were sold sub-prime loans.

One woman whose literacy level did not permit her to understand the nitty-gritty of mortgage ins and outs. An agent sold her a string of refinancing loans that summed up to more than $100,000. Now the house she bought in the 70’s is going to be lost.

The unethical brokers sniffed out people who for generations never had the chance to build up a good credit record. They were told that a godsend chance had come for them to turn their equity to advantage. Some people are skeptical about the high talk of banks and lenders. But many others tended to trust them and the image they represent. They believed that the lending institutions have the best interests of the borrowers uppermost in their minds. It is this trust betrayed of the Hispanic and Afro-American neighbourhoods that the lenders betrayed.

Many who rose to the bait are now in the foreclosure net. They continue to have a guilty feeling of having done something wrong. This negative bent of mind is very important to the lender community because it prevents the victims from retaliating.
The foreclosure victims are traumatized into inaction.

To Afro-Americans the equity on the house is a very important thing – it is part of real wealth. There is no denying that a huge wealth gap exists between the black and while Americans. The lenders steered the minorities into high-risk loans in a very subtle way with the Judases among the Blacks who captured their prey in Black churches and meets.

Although the Afro-Americans and Hispanics will absorb about half the economic loss due to foreclosures they are definitely not half of all those who borrowed. The Black borrowers ranging from all economic levels were two to three times more likely to be saddled with sub-prime loans than the Whites.