Blacks and Hispanics Lost $1 Trillion in Home Equity

Story tools

Comments

A A AResize

Print

Share and Email

 
 Among the 10.9 million homes that went into foreclosure between 2007 and 2011, more than half of the “spillover” cost to nearby homes have led to a $1 trillion loss in home equity for African-American and Latino families., according to a new report by the Center for Responsible Lending titled, “Collateral Damage: The Spillover Costs of Foreclosures.”

The report said, “Families impacted in minority neighborhoods have lost or will lose on average, $37,084 or 13 percent of their home value.” By comparison, the overall average American homeowner affected by nearby foreclosures will lose only seven percent of their home value, or $21,077.

The most recently-available census data shows that African Americans and Latinos comprise less than 30 percent of the nation’s population. Yet together, neighborhoods of color shoulder more than half of the $1.95 trillion in the drain on neighboring property values as a result of foreclosures.

“CRL’s report is troubling evidence of how much the economic cost of foreclosures are spilling over into communities all over America,” said Wade Henderson, president and CEO of the Leadership Conference on Civil and Human Rights. “Communi­ties of color—which have been targeted for years by predatory lenders, and abused for years by mortgage servicers—have been practically drowning. Until policymakers get serious about reducing foreclosures and restoring meaningful home ownership in all communities, a full economic recovery will likely remain out of reach.”

Compounding the problem, communities of color still suffer from stark wealth gaps when compared to whites. Earlier this year, the U.S. Census Bureau found that African Americans, Latinos and Asian-Americans together lost nearly 60 percent of median household net worth from 2005-2010. Over that same period, median net worth for white families dropped by 23 percent, about a third of the loss rate for people of color. With fewer investment portfolios and lower earnings, the hope to build wealth for communities of color often rests with the value of their home investment.

Read more here.
 

Comments

 

Disclaimer: Comments do not necessarily reflect the views of New America Media. NAM reserves the right to edit or delete comments. Once published, comments are visible to search engines and will remain in their archives. If you do not want your identity connected to comments on this site, please refrain from commenting or use a handle or alias instead of your real name.