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Race and Recession: Foreclosure Losses Still Mounting – COLORLINES (PARTICIPATION)

January 25, 2012




Race and Recession: Foreclosure Losses Still Mounting – COLORLINES

by Seth Freed Wessler

It has been more than two years since Sandra Hines got shoved out of her family’s home of 38 years, but her loss still feels fresh and raw. She remains proud of her northwest Detroit neighborhood. Its streets are lined with stately trees and dozens of modest brick and concrete houses like the one her family called home for a generation. Today, the two story house sits empty, but through the window a ladder and can of paint can be spotted in the living room — signs that the new owner has been here working.

Hines, now in her mid 50s, looks inside and sees her lost future. “They were going to grow up,” she says of her two nieces, “and this was going to be the house for them, from one generation to another… the one that was going to be passed down in the family.”

Two years ago, Hines, her two sisters and a niece watched as bailiffs came to the house to throw out their belongings and padlock the doors. “I never imagined we’d be in this place,” she told me through tears not long after the foreclosure. “I moved into that house when I was 18 years old. It was our base.”

But the summer of 2007, the Hines took out an adjustable rate refinance loan from H&R Block, to do some repairs on the house. Like millions of other families, when their monthly payment began climbing after just three months, they could no longer keep up. They fell rapidly into default and just days before Christmas they were evicted, becoming one of 2.5 million foreclosures completed between 2007 and 2009. Some analysts predict another 10 to 13 million more will begin the foreclosure process before the crisis ends.

The Applied Research Center, which publishes ColorLines, featured Hines’ story in Race and Recession, a 2009 investigative report on the uneven fallout of the economic downturn. The report finds that the economic crisis is not only impacting communities of color at disproportionate rates, but that the country’s long failure to address systemic racial inequity through public policy eventually threw the whole economy into free fall.

sandra_neighborhood.jpgNow, as the country slumps toward completing a third year of this recession, it continues to roll roughshod through communities like the one Hines once called home, where boarded up windows and empty driveways now litter a once vibrant neighborhood. Despite the Obama administration’s foreclosure prevention program, little has changed in either the scale or pace of lost wealth—and community—in places like this. In the ColorLines video above, which was featured on GRITtv this week, Hines revisits her former community and reflects on her own loss.

A recent report from the Center for Responsible Lending found there are almost 6 million homes at imminent risk of foreclosure right now. These are homes where the owners are at least two mortgage payments behind. Goldman Sachs estimates that by 2014, 13 million homes will be gone. And Black, Latino, Asian, Native American and Alaskan Native/Pacific Islander borrowers are all more likely than White borrowers to be at risk of losing their homes immediately. One in five of both Black and Latino homeowners today are at the brink of foreclosure.

In dollars, the losses already tallied will mean that between 2009 and 2012, Black and Latino communities will be drained of $194 and $177 billion, respectively, because of the plummeting home values in the high foreclosure neighborhoods. “This is wealth that would have been passed down, used to pay for college, to use in retirement, to buy a car,” says Keith Ernst, who authored the Center for Responsible Lending report.

In 2009, the White House pushed through its Home Affordable Modification Program, or HAMP, as the president’s signature foreclosure prevention program. Congress rejected reforming bankruptcy law to allow judges to modify home loans and the administration resisted calls for HAMP to include forced reductions of principal balances on loans. Instead, HAMP offered mortgage servicers incentives to reduce struggling borrowers’ monthly mortgage payments to no more 31% of their income by bringing down interest rates and extending the life of the loan.

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From → Participation

  1. Olivia Newhouse permalink

    This video and article really articulate how banks continue to be racist with out even thinking they are. In my opinion the banks continue to give black people these higher rate loans because years ago it was considered “fair.” I can’t see how it’s fair to have a white and black person come into a bank and ask for a loan and if they have the same income how can the bank see it fair to give one a higher loan just based off the color of there skin!?

  2. Desirae permalink

    This video really shows what some of the African race are going through. It is unfair that Sandra Hines has had to go through for-closure when she has obviously shown interest in taking care of her home for 38 years. No matter what we try and make ourselves believe there will always be some part of people who will not show equality. It is unfair for the color of ones skin to effect the future of their home. If African Americans and Caucasians were both having to face for-closure it would likely go through for an African family. The type of skin color has influenced a number of factors for people whether it is the types of jobs they can receive, education, and or economical reasons. The video shows a great deal of evidence relating to how many people on Sandra Hines neighborhood are under for-closure. It is due to the fact that a number of them have dark skin. It is unnecessary to judge someone based on his or her color skin. Skin color does should not determine a bankers decision on who should receive a higher rate loan. That just shows that they are trying to test blacks based on whether they are capable of paying such a high rate. When in reality doing that only makes it more difficult for the blacks to even try and keep their home. If banks are going to higher the rate loan for an African family they should do the same for a Caucasian family. Then maybe they can see that it is not just Africans who have to suffer but Caucasians as well. Equality should be shown on an everyday basis and not only when it benefits people. It is sad to know that blacks, Latino, Native Americans, and Alaskan Native Pacific/ Islander borrowers are more “likely than White borrowers to be at risk of loosing their homes immediately”. What has this world become of to make innocent people loose their homes? It is unfair that this is even being said. For-closure is impacting people for no other reason besides their race.

  3. Jacob Holmes permalink

    We all have families, we all have loved ones, and we all have items or property that has been passed down generation to generation. Some things are more important than others, but they all hold some sentimental value in one way or another. Foreclosure through a house is definitely a tough thing to go through, I do not have first hand experience with foreclosure, but I do have extended family that does. They have lower paying jobs, they have children that need to go to school, and they need food and clothing. It is a lot of expenditures and hoops that our society requires us jump through. Also, this whole foreclosure incident is not happening just to blacks, but to whites as well. Detroit is a predominantly black city, and most neighborhoods are solely black based. My uncle who is white, is close to losing his house, which was my grandmothers who passed away about four years ago. He can not find a job to afford food, new clothes, or anything really. The government is not doing anything for him, so when we are trying to talk singularly to the black community about how they are so much more porous than whites, I say bullshit, because I am experiencing the loss of loved ones houses and lives are being ruined that are close to me, and I have no control over it, and my family can not help at all because they have to live within their own means and be able to function themselves. So, “unless you go through this experience, you really can’t imagine what it is like when a person is thrown out of their own home that they have lived in [their whole life].” Even though blacks are more likely to given predatory loans, they at least have the opportunity to turn what the bank is trying to do upside down, and make it work, while others have no opportunity to receive a loan at all.

  4. Kyla Chappell permalink

    These videos and article show how oblivious banks are to their actions. They continue to favor whites by giving them lower rate loans, where a black person with the same attributes would still be given a higher rate loan. So because this was so called “fair” in earlier days, it still holds true? Times have changed. Seems as though banks should be a part of this change and all loans, or any other service of the banks for that matter, should be equal for ALL.

  5. Kaylie DeWitte permalink

    These are examples of how racism has carried over to the contemporary. So many African Americans/Latinos/Native Americans are being foreclosed or evicted from their home simply because of the racism that goes on today. People believe that they aren’t being racist because everyone is still getting the “same opportunities”, but in reality they’re just abiding by the “separate but equal” rule. These people aren’t being directly racist towards blacks or Latino’s, but showing it through their actions by raising mortgage loan costs and evicting people from their homes. It’s sad to see subtle racism still play out today when we’ve come so far from what history has shown us. Different ethnicities than white still face the hardships they were facing 30-50 years ago. This just shows that the past still matters because people are playing off of actions made back then and not allowing racism to grow out of its slump.

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