More Blacks and Hispanic Latinos are Losing their Homes to Foreclosure

They lost their homes, they do not have a credit card to use and they are paying for a more expensive rent compared to their mortgage payment.

The decline of the housing market had a tremendous effect on almost all races. However, the most severely hit are the black Latino groups. This led to a decrease in the rate of homeownership to its lowest state, shows the new data of the 2010 Census.

Around 36% of blacks still have their own homes. But this is lower than the 40% rate of homeowners in their population in 2000. For the Latino group, the homeownership declined to 47% from the 49% from way back in 2000.

On the other hand, whites have a 67% ownership while Asians at 62%. This is an increase from its rate in the past decade.

Almost all races experience an increase in the rate of homeownership during the boom of the housing market and the doubling of home values between 2001 and 2006. But, in the following housing bust, it changed as the whites and Asians suddenly lost a lot of what they had already gained. As for Blacks and Latinos, they almost lost everything they had gained and even more.

The reason for this is that the number of blacks and Latinos who took out subprime loans during the housing boom were higher. The loans were taken because they were able to afford it and they wanted to take advantage of the housing boom for any price, said a number of real estate experts. Moreover, Traditional loans which are safer required plenty of upfront cash. The loans which basically had low rates of interest suddenly increased in the following years which led to a consistent number of foreclosures.

But, almost six interviewed experts said that the lenders and mortgage brokers in a few cases aimed for blacks and Latinos to obtain subprime loans in order for them to earn money from higher rates of interest and lending charges. As proof of this claim, they determined studies that show how lenders oftentimes sold the subprime loans to most Latinos and blacks who were eligible for less expensive traditional loans.

The results of this have been devastating. A lot of minorities lost their most important property. Plenty of homes in neighborhoods where most minorities live can be purchased with the price of a car. Moreover, bad credit combined with the struggling economy have caused the unemployment rate and income reductions to continuously increase in the groups of Latinos and blacks.

85% of whites are now more likely to own a home compared to blacks and 45% compared to Latinos.

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Tagged with: black • foreclosure • hispanic • subprime

Filed under: home loans

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