Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Foreclosure crisis hits minorities harder

chart_foreclosure_rate.top.gifAfrican-Americans and Latinos are losing their homes to foreclosure at a higher rate than whites. By Tami Luhby, senior writer


NEW YORK (CNNMoney.com) -- The mortgage meltdown is hitting the African-American and Latino communities harder than whites, a new study has found.

Of borrowers who took out mortgages between 2005 and 2008, some 8% of both African-American and Latino borrowers have lost their homes to foreclosure, compared to 4.5% of non-Hispanic whites, according to a study by the Center for Responsible Lending, released Friday.

The racial and ethnic disparities continued even after controlling for income differences. The center's research shows that African-American and Latino borrowers were about 30% more likely to get higher rate subprime loans than white borrowers with similar risk characteristics.

Of the total pool of homeowners, 17% of Latinos have lost their homes to foreclosure or are at imminent risk of losing their homes, while 11% of African-Americans are in that position. By comparison, 7% of non-Hispanic whites have lost their homes or are about to.

The reason for the disparity is that African-Americans and Latinos were marketed riskier, higher cost loans that became unaffordable during the mortgage and economic crisis, said Keith Ernst, the center's director of research.

"These are more expensive mortgages," he said. "They are more likely to fail."

African-American and Latino communities are likely to lose $373 billion in declining property values between 2009 and 2012.

The report also found that an estimated 2.5 million foreclosures were completed between 2007 and the end of 2009. This is roughly one in every 20 mortgages outstanding at the time of the crisis.

More than eight in 10 of these foreclosures were on owner-occupied homes with mortgage originated between 2005 and 2008.

An estimated 5.7 additional foreclosures are imminent.

"This crisis still has a long way to go," Ernst said. To top of page

Search for Jobs

Index Last Change % Change
Dow 20,656.58 -4.72 -0.02%
Nasdaq 5,817.69 -3.95 -0.07%
S&P 500 2,345.96 -2.49 -0.11%
Treasuries 2.42 0.02 0.92%
Data as of 4:43pm ET
Company Price Change % Change
Bank of America Corp... 23.07 0.13 0.57%
Ford Motor Co 11.67 -0.10 -0.85%
Advanced Micro Devic... 13.79 -0.31 -2.20%
Micron Technology In... 26.47 0.41 1.57%
Chesapeake Energy Co... 5.09 0.09 1.80%
Data as of 4:15pm ET
Sponsors

Sections

The Trump National Golf Club in California is offering a $10,000 reward for information on the people who vandalized the course. More

The poorest Americans would be hit hard by the GOP bill to repeal Obamacare, according to a new Urban Institute report. More

The Federal Communications Commission voted Thursday to approve a proposed rule that would make it easier for phone companies to crack down on robocalls. More

Your credit score plays a major role in your personal finances. The better the score, the better it is for your wallet. Here's how to help get it above the 800 mark. More