Is Home Qwnership Still the American Dream?

Is Home Ownership Still the American Dream?
by Nona Willis Aronowitz

Housing has been on this journalist’s mind lately. I just moved back to New York City after being gone for a while, and the reality of real estate here has hit me like a punch in the gut. Shiny condos that sit half empty have replaced warehouses and greasy spoons I used to know. Subsidized middle-class housing complexes have 20-year waiting lists. New Yorkers like me are priced out of their childhood neighborhoods.

Thoughts of my gentrified hometown reverberated through my head a few weeks ago when we visited Miami, a city still knee-deep in the housing crisis. This metropolitan area was one of the epicenters of the housing boom, where new constructions and sub-prime mortgages abounded a few years ago. A few hours after we stepped off the plane, we met Max Rameau, founder of Take Back the Land. The group moves homeless people into government-owned, foreclosed homes that are standing empty. (Check out the video above to hear his philosophy.)

We also met Ruby, a Miami native whose house was at risk of foreclosure after going through a bankruptcy and several rounds of refinancing. To her, a house is everything–a place to make your mark on the world. It is a place to lay down roots and engage in a community, a place to make beautiful, to make yours.

“The American dream is now a nightmare,” she told us listlessly. A little later: “Capitalism should not mean greed, but that’s what we’ve had.” Ruby didn’t expect elected officials to do much about her situation. She waxed poetic about her house, but she was disappointed–not only by the government, but by the direction of our country. She felt alone and in limbo.

Read the Full Essay @ Pop & Politics

Foreclosure Crisis Intensified Among Blacks: Study

from The Huffington Post

Foreclosure Crisis Intensified Among Blacks: Study
by William Alden

African Americans have suffered disproportionately from foreclosures due to racially discriminatory lending practices, a new study shows.

The study, authored by Douglas Massey and Jacob Rugh of Princeton, looks at racially segregated neighborhoods, where the percentage of minorities (particularly blacks, Hispanics and Asians) is higher than in the country as a whole. Using a black "dissimilarity index" to measure how a region's African-American makeup differs from the national percentage, the authors found that one standard deviation increase in this index -- when a community is slightly blacker than the nation as a whole -- increases the number of foreclosures by 15,028 and the foreclosure rate by 1.68 percentage points. As Salmon points out, that's quite high, given that the nation's foreclosure rate is 4.14 percent.

Before the housing bubble burst, blacks were more likely than their white counterparts to be given "subprime" loans, with high (or increasing) interest rates and hidden fees. It's a practice often referred to as "predatory lending." As Reuters notes, blacks with similar credit scores to whites were given worse deals on their loans, suggesting that race played a role in the way some lenders structured these deals.

Among lenders that went bankrupt in 2007, blacks were three times more likely than whites to receive subprime loans, according to a previous study that the authors cite in their report. Among lenders that did not go bankrupt, blacks were equally as likely as whites to receive "predatory" treatment.

The structures of these subprime mortgages made default especially likely, contributing in large part to the housing market meltdown that led to the financial crisis. But lenders didn't have to worry about the risk of default: With the rise of mortgage securitization in the 1980s, lenders could originate loans and sell them off to banks, which repackaged them and sold them to investors. The popularity of mortgage-backed derivatives, especially collateralized debt obligations, in the years leading up to the crisis created a huge demand for subprime, high-yield bonds -- which in turn encouraged some lenders to engage in ever riskier practices.

Racial segregation concentrated and intensified the fallout from racially motivated lending practices, the study says. It also facilitated the lending in the first place, since lenders could target communities that they knew to be disproportionately black or Hispanic.

"Hispanic and black home owners, not to mention entire Hispanic and black neighborhoods, bore the brunt of the foreclosure crisis," the study says. The authors say the nation's civil rights legislation must be amended to include more effective mechanisms for enforcement.

Read Study Here

Would the Huxtables Survive the Economic Crisis?

Stop the Next American Nightmare
by Seth Freed Wessler

This weekend the New York Times reported that middle class families of color have been most hurt by the subprime crisis in New York City. The article confirms previous findings that show middle and upper income borrowers of color across the country are more likely to receive predatory, high cost loans than whites--even low-income whites. As a result Black, Latino, Asian and American Indian families are burdened with the heaviest weight of foreclosures.

I met many such families earlier this year while traveling the country to conduct research for "Race and Recession," a report released today by the Applied Research Center. In Detroit, I talked with 55-year-old Sandra Hines, who fell irreparably behind on her ballooning subprime refinancing payments (at the peak of the subprime frenzy, the majority of high cost loans were for refinancing). Through foreclosure, Hines lost the house where she and her two sisters grew up. It was the house that held 40 years of her family's wealth and memories.

The losses didn't end there.

A few months later, Hines and her family were renting a home that also went into foreclosure (its owner was also Black). Hines was evicted again.

Hines's story illustrates the fundamental way in which racism works today - through rules and policies rather than through blatant individual discrimination. This new form of discrimination didn't come from an individual banker who hated Black people. Rather, it resulted from financial deregulation that didn't explicitly target people of color, but that nevertheless produced a racialized impact because it was blindly laid on top of decades of blatant housing segregation.

Read the Full Essay @ The Huffington Post