Showing posts with label Minority Homeownership. Show all posts
Showing posts with label Minority Homeownership. Show all posts

Tuesday, May 12, 2009

Last In, First Out....Minority Gains in Homeownership Erode.

According to the New York Times, "After a decade of growth, the gains made in homeownership by African Americans and native-born Latinos have been eroding faster than those for whites, according to a report released Tuesday by the Pew Hispanic Center.

The numbers indicate that the gains for minority groups, achieved between 1994 and 2004, were disproportionately tied to relaxed lending standards and subprime loan products, and that those gains are now being reversed.

The exception to the pattern was foreign-born Latinos, whose rate of homeownership, while low, has stalled in the downturn but has not fallen.

Since 2004, homeownership for all Americans has declined to 67.8 percent from 69 percent. For African Americans it fell to 47.5 percent from 49.4 percent. Latinos had a longer period of growth, with homeownership rising until 2006, to 49.8 percent, before falling to 48.9 percent last year. Homeownership for native-born Latinos fell to 53.6 percent from a high of 56.2 percent in 2005. "

So much for the Federal Reserve's "Consumer Advisory Council, established in 1976, (which) advises the (Federal Reserve) Board on the exercise of its responsibilities under the Consumer Credit Protection Act and on other matters in the area of consumer financial services."

This is, of course, not surprising. Some part of the fraudulent lending practices that have damaged the economy were designed to achieve this outcome. Keep in mind that blaming the crisis on CRA or subprime lending is flat out wrong. As we pointed out in March, there simply were not enough subprime borrowers to cause a catastrophe of this magnitude. For that, you needed greed-induced leverage, a complete lack of ethics, and a set of parasitic financial institutions.