The Indypendent has an in-depth look at how the rash of foreclosures across the country rooted in subprime lending has hit minorities much harder than other racial/ethnic groups hardest. Here in New York, subprime loans made up 27 percent of refinances last year. People of color are more than three times as likely to hold subprime loans as non-minorities, and one in four homeowners with subprime mortgages in Crown Heights and Bedford-Stuyvesant, predominantly black neighborhoods in recent decades, were in foreclosure last year, according to federal data. If you were a profiteer looking to make money, you’re going to go into these communities with instruments that make refinancing or ownership look much more attractive, says Dr. Julianne Malveaux, economist and president of Bennett College for Women in North Carolina. And you’re going to do that by taking advantage of a historic antipathy between the black community and banks. The article tells the story of a black senior citizen who’s owned a home in Crown Heights since 1975. He was sold a subprime mortgage re-fi in 2006 with a rate that skyrocketed after a six-week teaser period at 1 percent. The homeowner, who suffers from dementia, now faces foreclosure. The broker who sold him the ARM got a $6,675 broker’s fee and another $14,420 from IndyMac for hawking a No Income No Asset Loan.
Facing Foreclosure [The Indypendent]
Photo by dominic bartolini.