"Whether we're talking about oil spills or housing catastrophes, it's clear that America needs to invest in prevention, clean-up and recovery," said CRL President, Mike Calhoun. "As Congress finishes financial reform legislation, the rules on home lending need to get stronger, not weaker. We need to make sure a foreclosure crisis of this type never happens again, and, though so many homes have been lost, it's not too late to prevent more damage."
The percentage of homes in some stage of foreclosure in the United States is the highest on record and five times the norm, but little study has been done to quantify this trend. This report provides the most detailed estimate yet of how many foreclosures have been completed since the crisis started in 2007, how many more homes are on the brink of being lost, and how this man-made disaster has disproportionately damaged African-American and Latino communities.
No single set of numbers exists to tell this story. Instead, CRL used several databases to compute reasonable, even conservative, estimates that together add up to a grim picture: The United States has tolerated a dysfunctional lending system that has disproportionately eroded the wealth of communities of color and set them even further behind other groups on the economic ladder.
Among the report's findings:
- An estimated 2.5 million foreclosures were completed from 2007 – 2009 and an estimated 5.7 additional ones are imminent. (Independent estimates have suggested that up to 13 million homes will be lost through 2014.)
- On completed foreclosures, most on mortgages made between 2005 and 2008, we estimate that 56% involved a white family. But African American and Hispanic families have received a disproportionate share, even when accounting for income: Nearly 8% of both groups have already lost a home, compared to 4.5% of white borrowers.
- The great majority of homes lost were owner occupied, as are those at imminent risk of being lost.
Here are several civil rights leaders' comments on the report:
"The findings in this report describe the devastating impact that the casino culture of Wall Street and the mortgage industry is having on communities of color. Instead of owning a piece of the American dream, these hardworking families have borne the brunt of an anything-goes regulatory system that has turned a blind eye toward predatory lending and the needs of vulnerable consumers, who may never recover the wealth they have lost. The report demonstrates why we need a strong, independent Consumer Financial Protection Bureau, and why mortgage servicers must act swiftly to help more families keep their homes." - Wade Henderson, President and CEO of The Leadership Conference on Civil and Human Rights.
"We know that with the right tools, every family in America can share in the American Dream. Knowing this makes these recent findings very disturbing. Latino homeownership will retract by 17% by the time we feel the full effects of the fallout from the credit crisis. That's more than one million Hispanic households, an outstanding figure and higher than other groups. This crisis is moving our community in the wrong direction and it's unacceptable." - Janet Murguia, President and CEO of NCLR (National Council of La Raza.)
"With 17 percent of Latino and 11 percent of African-American homeowners having essentially already lost their homes and estimates that many more foreclosures are on the way, we need Congress to hurry up and pass an independent Consumer Financial Protection Agency. We also need servicers to do whatever is necessary to stop this hemorrhaging now. Enough is enough." - Shana Smith, President and CEO of the National Fair Housing Alliance
