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It’s national homeownership month, as declared by President Bush in 2002 to illuminate the goal of increasing homeownership among minority households. I saw a press release today from the National Association of Realtors, touting that organization’s support of the emphasis month.
The NAR release points out some gains on the homeownership front in several minority communities:
Though homeownership has generally increased among most minorities over the past three years, there is still a disparity between ownership levels for different groups. The homeownership rate for African American households during the fourth quarter of 2006 was 48.2 percent, while Hispanic households were at 49.5 percent. The homeownership rate for Asian, Native Americans and Pacific Islanders was 60 percent.
By comparison, 76 percent of non-Hispanic whites were homeowners in the same period.
I thought I’d run the campaign past Aracely Panameño, the director of Latino affairs for the Center for Responsible Lending. That group has noted the disproportionate foreclosures among minorities due to high-risk, high-interest loans that were made predatorily, the center contends.
Panameño said the center wants to take advantage of the nation’s focus on homeownership in June to keep the fallout from the subprime lending crunch in the spotlight. Subprime loans are mortgages made to consumers with poor or thin credit, and minorities who’d often faced hurdles to qualifying for traditional financing were able to access subprime loans.
I wrote about the concentration of foreclosure activity in areas of San Diego County that have larger-than-average Latino populations and tend to be closer to the U.S.-Mexico border in this story:
Because a widened lending gate allowed many more Latinos and other minorities into the housing market than had entered previously, lawmakers and special interest groups championed the lenders’ efforts to extend homeownership to those groups. But the loans that largely propped that gate open were loans that have turned dangerous quickly as the market cools, sticking borrowers with skyrocketing mortgage payments and causing many to lose their homes.
Panameño said the center’s analysis of low- and moderate-income families yields a different picture than the rosy report touted by politicians. Of the more than 84,000 subprime loans made to California’s Latinos in 2005, the center predicts nearly one in five will end in foreclosure.
“They are experiencing a net loss of homeownership in the subprime market for communities of color,” she said.
More from my recent story, which quoted some statistics from the Center for Responsible Lending:
Nearly half of the Latinos in California who purchased a home in 2005 did so using loans meant for consumers with poor or weak credit, according to the Center for Responsible Lending. Those loans usually featured low introductory rates but reset after a couple of years, pushing monthly mortgage payments to impossible heights for some borrowers, and increasingly resulting in foreclosure.