Subprime Crisis Causing Huge Loss of African-American Wealth

San Francisco Bay View, News Analysis, Christina Kasica Posted: Jan 23, 2008

Boston - A new report says the subprime mortgage crisis will cause African-Americans to experience wealth losses of between $71 billion and $122 billion over its duration. The racial bias of subprime mortgage lenders accounts for a 40 percent difference in losses between whites and people of color.

This will mark the fifth year that United for a Fair Economy (UFE) has published a State of the Dream report on Jan. 15, the actual date of Dr. Martin Luther King's birthday, which will be officially celebrated on Jan. 21. This year's report is called " is available at .
Foreclosed: The State of the Dream 2008."

"As we approach the 79th anniversary of the birth of Martin Luther King Jr., it's important to realize how much ground middle- and working-class Americans have lost in the subprime crisis," said Amaad Rivera, program leader for the Racial Wealth Divide team at UFE and a report co-author. "Our estimates indicate that it will cause the greatest loss of wealth for African-Americans in modern U.S. history."

"The dream of economic stability and opportunity for everyone living in the U.S., so eloquently described by Martin Luther King Jr., is bound up with homeownership, the most significant source of wealth for most people," said Dedrick Muhammad, senior organizer and research associate at the Institute for Policy Studies, a co-author of the report.

"As a result of cold-blooded targeting of people of color - and low-income people in general - by the subprime mortgage industry," said Brenda Cotto-Escalera, co-executive director of UFE and a co-author of the report, "communities across the nation are being torn apart. As mortgages go into foreclosure, people move out, houses are boarded up, crime and fires increase, neighboring properties are devalued and the tax base erodes."

The report details the types of subprime loans developed and offered by the industry since 1995, presents evidence of their effect on minority and low-income communities and outlines potential solutions.

United for a Fair Economy is a non-profit, non-partisan organization that spotlights the growing economic divide and works across races, ethnicities and classes to help shrink it. Visit them at www.faireconomy.org.

$4.6 M pledged to help stop foreclosures

A step toward a positive solution to the foreclosure crisis was unveiled Monday. The California Reinvestment Coalition (CRC) has partnered with eight financial institutions and two foundations to make possible a $4.6 million initiative that will increase the number of mortgage counselors in the state.

Mortgage counselors are often the only people borrowers trust when struggling to make payments on their home loans. The California Home Ownership Preservation Initiative will help mortgage counseling agencies meet the needs of troubled borrowers as the California foreclosure crisis worsens.

Counseling agencies report being overwhelmed by the 200 to 500 percent increase in homeowners walking through their doors in 2007. It is predicted that half a million California mortgage borrowers will struggle to make payments on their home loans in the next two years.

For more information, contact Alan Fisher at the California Reinvestment Coalition at (415) 864-3980 or afisher@calreinvest.org or visit www.calreinvest.org.

Related Articles:

American Indian Mortgage Glass Half-Empty in 2007

New Legislation Targets Sub-Prime Loans

A Silver Lining in the Subprime Meltdown


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User Comments


JosephBisogno on Jan 28, 2008 at 01:29:36 said:

Our Loan Compliance Advisory Group is committed to helping "Protect The American Dream." We are dedicated to helping Homeowners Nationwide, that may be victims of Deceptive Lending Practices.We are open for any suggestions on how we can help. Please contact Joseph Bisogno at (800) 529-7184 or visit our web site at www.loancomplianceadvisorygroup.com

Several members of our Loan Compliance Advisory Group attended the "March on Wall Street." We support the "Save Our Homes/Restructure Loans" important message that Rev. Jackson and his dedicated coalition members are spreading across America. The December 10, 2007 rally, one of several recently held across the United States, sponsored by Rev. Jessie Jackson's Rainbow PUSH Coalition, the National Association for the Advancement of Colored People and the Urban League, was a magnificent well planned informative event.


Barbara Ann Jackson on Jan 23, 2008 at 17:20:15 said:

re: Due to Foreclosure Fraud, Some Homeowners Actually Still Own Their Properties

In conjunction with initiatives being urged to address the foreclosure crisis, it is important to call attention to this fact: BECAUSE OF FRAUDULENT FORECLOSURE PROCEEDINGS, SCORES OF PEOPLE HAVE NOT LAWFULLY LOST OWNERSHIP OF THEIR PROPERTIES, AND LEGALLY ARE STILL THE OWNERS, but they do not know it!

Debt Collection Abuse and Deception is the most Lethal kind of Foreclosure Fraud! In fact, Freddie Mac\'s YOU TUBE video \"warning\" about fraud is misleading since Freddie Mac itself willfully participates in MORTGAGE and FORECLOSURE FRAUDS! Consider this impossibility: In August 2005, Freddie Mac evicted Louisiana property owners because Freddie Mac falsely claims to have purchased their property in year 2005, from a mortgage company which has been defunct since year 2002. **See Proof at:
www.lawgrace.org/2008/01/05/united-states-chief-justice-robert%e2%80%99s-aim-to-raise-to-raise-federal-judges-pay-is-revolting-new-orleans-federal-judiciary-call-to-impeach-judge-g-thomas-porteous/*Also posted on the lawgrace.org site is the year 2004 affidavit from the “successor in interest” to that defunct company.

Debt collector attorneys file foreclosures naming defunct mortgage companies, or companies which no longer hold the notes; or affix collectors' fees exceeding "Acceleration Clauses." If homeowners sue or "Unfair Debt Collection Practices," collectors make more $$ through protracted litigations.

**For a purported debt of $86,000.00, through use of a non-existent mortgage company, attorneys racked up more than a quarter of a million dollars in litigation fees. Later, the property was sold to a 3rd party for $37,000.00. Investors got nothing, nothing practical was accomplished by evicting the homeowners, and neighborhood property values declined.

In States like Louisiana, because Wells Fargo and Freddie Mac greatly benefit from fraudulent foreclosures any representation about $$$ billion dollar losses due to people defaulting on mortgages should be weighed against needless payments of legal fees to law firms which outmaneuver -and even persecute people who file court proceedings in opposition to fraudulent foreclosures and repossessions.

Additionally, some collectors file in Bankruptcy Court falsified motions to \"Lift Stay\" pleadings for purposes of accomplishing SIMULATED AUCTIONS of real estate properties. Also, as an added measure to heighten chances of judicial favor, collector attorneys propagate that defaulted property owners are costing their clients a lot of money, while the true culprit is collectors\' fraud and racketeering. Exploiting distressed property owners for purposes of making money from their predicaments and then lying on them to the courts has to be the cruelest exploitation and maligning against people faced with becoming homeless!

Securities Investors need to become more knowledgeable, responsible and take action about collectors as well as mortgage servicers\' misdeeds which hurts borrowers as well as siphons incalculable amounts of money from what Investors profit. Also, see \"Limiting Abuse and
Opportunism By Mortgage Servicers,\" AND \"Private Property Rights Deferred: Has Predatory Mortgage Servicing Destroyed The American Dream\" by Rawle Andrews, Jr., Esq.,and Leroy Jones, Jr., J.D. at www.msfraud.org.
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Here\'s a few more links:

-Mortgage Mess, Foreclosure Fraud and Impediments to Justice
newsblaze.com/story/20071203130614tsop.nb/newsblaze/TOPSTORY/Top-Stories.

-ILLEGAL REAL ESTATE FLIPPING...
www.lawgrace.org/2007/06/21/illegal-real-estate-flipping-unfair-enrichment-etc/

-Comment on the Foreclosure of Judge Reginald Badeaux\'s Home
www.lawgrace.org/2007/12/08/my-december-7-2007-comment-posted-to-the-times-picayune-blog-about-the-news-article-entitled-%e2%80%9cjudge-gets-debt-reprieve-badeaux-has-skipped-mortgage-payments%e2%80%9d-the-foreclosure-of-this-lo/

-Federal Judges\' Pay Raise; New Orleans Federal Judiciary Call To Impeach
newsblaze.com/story/20080101084831tsop.nb/newsblaze/TOPSTORY/Top-Stories.html

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