Thursday, July 31, 2008

Housing Crisis Hitting People of Color Hard
Copyright © 2008 by Leo E. Laurence • All rights reserved
People of color are being hit especially hard by the housing crisis, but the nation’s media have not been covering this issue very comprehensively.

Borrowers of color accounted for half the increase in homeowners from 1995 to 2005, according to Harvard’s Joint Center for Housing Studies.

Latinos represented about 46 percent and blacks about 55 percent of those who took out mortgages, but got higher-cost loans, compared with about 17 percent for whites and Asians.

“Many of these people with subprime loans were misled. In some cases, fraud was involved and some just got in over their heads,” says Gregg Robinson, co-chair of the Affordable Housing Coalition of San Diego and reported by staff writer Penni Crabtree of the San Diego Union-Tribune, one of the few major newspapers which has covered the affect of the housing crisis on communities of color.

Many of the Latinos who took out these subprime loans spoke little or no English. They were relying – perhaps naïvely - on the honesty and professionalism of the housing agents with whom they did business.

Cesar Gonzales saw his neighbors becoming owners of houses, and he wanted one, too. He trusted his realtor and the loan officer.

“But once you sign the loan papers, you take the responsibility and the risk,” said Adelina Enriquez, a counselor at Community Housing Works, a non-profit that offers free counseling to distressed homeowners.

Gonzales “didn’t understand what he was doing,” she added.

Gonzales is a construction worker who speaks little English and dropped out of school after the fifth grade. It’s a problem that many Latinos, particularly in California, faced as loan officers pushed risky loans.

Latinos and African-Americans make up a disproportionately large share of the thousands in the nation who face losing their home to foreclosure or are in default on their loans with adjustable interest rates that are rapidly rising.

Gonzales, speaking through an interpreter, said he still is uncertain what kind of loan he signed up for on the $565,000 duplex he bought last May.

His monthly income was $3,200, but the monthly mortgage payments were $4,200; so the loan was probably ill conceived from the beginning.

Recently, his lender, Countrywide (which has figured prominently in the housing crisis), called Gonzales to ask why he was late with his payments.

For comment, contact Leo Laurence at or call (619) 757-4909.