California’s foreclosure crisis & racism
By
Terri Kay
San Francisco
Published Sep 2, 2010 9:56 PM
California is in a state of economic emergency on many fronts. Not only does
official unemployment hover around 12 percent, but approximately 702,000 homes
— nearly 1 in 8 — are currently in foreclosure.
Foreclosure victims in Sacramento Feb. 10 tell Gov. Schwarzenegger:
‘Terminate foreclosures!’
WW photo: John Parker
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Who is hurt the most from this crisis? Latino/a and African-American homeowners
make up more than half of all foreclosures in California, according to a new
report that looked at 600,000 foreclosures around the state.
“Dreams Deferred: Impacts and Characteristics of the California
Foreclosure Crisis,” by the Center for Responsible Lending, paints a
stark picture of the devastation wreaked in the state by the banks’
racist subprime mortgage schemes and resultant mass foreclosures.
“Conventional” mortgages at higher interest rates were also
targeted for sale to African-American and Latino/a home buyers.
The report notes: “It is well-documented that African-American and Latino
families disproportionately received the most expensive and dangerous types of
loans during the heyday of the subprime market. According to analyses of the
Home Mortgage Disclosure Act data, higher-rate conventional mortgages were
disproportionately distributed to borrowers of color between 2004 and 2008. For
example, in 2006, among consumers who received conventional mortgages for
single-family homes, roughly half of African-American (53.7 percent) and
Hispanic borrowers (46.5 percent) received a higher-rate mortgage compared to
about one-fifth of non-Hispanic white borrowers (17.7 percent).”
(responsiblelending.org/california, Aug. 17)
The report cites three key findings:
“Latino and African-American borrowers in California have experienced
foreclosure rates 2.3 and 1.9 times that of non-Hispanic white borrowers. Given
the high foreclosure rates for loans made in recent years and the large number
of loans to Latinos in those years, almost half of all California foreclosures
have been of Latino borrowers.
“The concentration and volume of California foreclosures differ
dramatically by region. The Central Valley and Inland Empire have the highest
concentrations of foreclosures, while the volume of foreclosures is highest in
major cities, such as Los Angeles.
“Contrary to some claims, most foreclosures have not been on sprawling
‘McMansions’ but rather on modest properties that were typically
valued significantly below area median values at origination.”
From coast to coast, record foreclosures and evictions show no end in sight. In
the meantime, unemployment, furloughs, lowered wages, anti-immigrant attacks
and every form of racism, repression and hardship are on the rise.
Gov. Arnold Schwarzenegger, like every governor around the country, has the
executive authority to declare an economic state of emergency and impose an
immediate moratorium to stop all foreclosures. This measure would cost nothing
but is opposed by the banks. The one item never touched in any state budget is
the interest payments and/or debt service paid to the banks.
In California the demand for an economic state of emergency and a moratorium on
foreclosures and evictions is a pivotal component in the fight against racism
and for jobs at living wages for all.
Articles copyright 1995-2012 Workers World.
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