Foreclosure Crisis Wipes Out the Wealth of Afro-Americans

June 25th, 2009

The foreclosure crisis has wiped out the wealth of the Afro-Asians – just when they were beginning to climb up the socio-economic ladder.

The last fifteen years had witnessed the biggest growth in ownership of homes. But that period has come to an end and the Blacks together with the Latinos are seeing all their wealth vanish – their biggest loss in modern times. This erosion will not remain isolated – it could well pull down the national economy for a second time within one year.

This was the heart of a message released by William C. Velasquez Institute. The report enumerates how this wealth that has been lost (over $200 billion during the previous three years) could place hurdles towards economic recovery for the entire nation if it remains unattended to.

Albert Jacquez of Strategic Solutions Washington said, “What we found was, quite frankly, much more dramatic than any of us thought it would be. Most importantly for the future –in the next year, 10 years, even 15 years as it relates to the emerging new class of potential homebuyers.” Jacquez is one co-authors of the white paper that was released.

The study showed that the Latinos and the Blacks were 230% and 270% more likely to be pushed into taking sub-prime loans. In the forthcoming two years it is apprehended that there will be 9 million foreclosures. In the states of California, Texas, Arizona and Florida it is the minorities that will be at the receiving end from this second foreclosure attack.

Those just entering the realm of seniors and elders, the baby boomers will now be sellers of homes and not buyers. As per demographics the new home owners should be the Latinos, the Afro-Americans and the Hispanics but unless reforms are instituted they will not have the money in their pockets to take advantage of the situation.

Dr. Raul Hinojosa of UCLA another co-author of the paper said, “The secret is that we are by no means out of the foreclosure crisis. All of the policies at the state and federal level are a fraction of what’s needed.”

Hinojosa feels that the Obama government has not fully addressed the problem. The relief that is being offered will benefit only 100,000 borrowers – this being only a drop in the ocean. He added, “The problem is that if you have a regulatory reform when your foundation is still crumbling. It is really not going to make a difference.”