America’s housing crisis is one of the biggest problems plaguing the economy, as the country’s homes have lost $7 trillion in cumulative value over the last five years. Four million Americans are either behind on their payments or in foreclosure, and a quarter of the nation’s homeowners are underwater on their mortgage. Those foreclosures have driven down home values in communities across the country.
According to a new report by the Center on Responsible Lending, however, the foreclosure crisis isn’t finished yet. In fact, with 3.6 million households at immediate risk of losing homes, we’re not even halfway through it. Even more damning from the report, though, is the fact that the housing crisis has disproportionately affected minority voters. Though more whites — who make up a larger share of homeowners — have been plagued by foreclosure, the percentage of blacks and Latinos affected is nearly twice as high:
Although the majority of affected borrowers have been white, African-American and Latino borrowers are almost twice as likely to have been impacted by the crisis. Approximately one quarter of all Latino and African-American borrowers have lost their home to foreclosure or are seriously delinquent, compared to just under 12 percent for white borrowers. Asian borrowers have fared better as a whole than Latino and African-American borrowers, but they, too, have been disproportionately affected, especially in some metropolitan areas.
Wall Street banks and lenders took advantage of consumers throughout the lead-up to the housing crisis, and this report shows that the lending, at times, was even more predatory when targeting blacks and Latinos. ThinkProgress reported on this disparity in 2009, when bailed-out banks were found to have pushed many minorities who qualified for prime loans into higher-priced subprime loans, which can add more than $100,000 in interest payments over the life of a loan. In fact, 30.9 percent of Latinos and a whopping 41.5 percent of blacks were given higher-priced loans by large banks, compared to just 17.8 percent of white borrowers.
As with almost everything coming out of the banking industry regarding the financial crisis, the report only makes the case stronger for the newly-created Consumer Financial Protection Bureau, the agency tasked with targeting and ending predatory lending and banking excess. Discriminatory lending is illegal, and yet for years, the banks have largely been able to get away with it. If the CFPB is allowed to operate as it was envisioned, perhaps those days can finally come to an end.