Foreclosure Rates Rise for Minority Homeowners
Not a good sign:
For Minorities, Signs of Trouble in Foreclosures By Vikas Bajaj and Ron Nixon, NY Times: ...[I]in the last several years, neighborhoods with large poor and minority populations in places like Cleveland, Chicago, Philadelphia and Atlanta have experienced a sharp rise in foreclosures, in some cases more than a doubling, according to an analysis of court filings and other housing data by The New York Times and academic researchers. The black home ownership rate even dipped slightly last year, according to the Census Bureau.
The increase in foreclosures could be the first of a wave of financial distress for many minority homeowners ... because they are twice as likely as whites to have taken out expensive subprime mortgages, most of which will jump to higher interest rates in the next two years... The Mortgage Bankers Association of America plays down the severity of foreclosures, noting that most new minority homeowners are doing well and that the Midwest is facing unique economic challenges. The trade group estimates that fewer than 1 percent of all loans were in foreclosure in the three months that ended last September...
But broad national statistics can obscure hard local realities. In Cuyahoga County, which includes Cleveland, ... court filings by lenders seeking to foreclose on delinquent borrowers totaled more than 11,000 in 2005, more than triple the number in 1995. A similar pattern can be seen in Chicago... Loan data that mortgage lenders must disclose show that minorities are far more likely to receive subprime loans than whites. ... The disparities persist even when income is taken into account. ...
Posted by Mark Thoma on Wednesday, February 22, 2006 at 01:18 AM in Economics, Housing |
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