Black Communities Mauled By Foreclosures

June 20th, 2008

The black communities, mauled by foreclosure houses are paying the worst price for the housing mess. In Orange County every day 70 house owners get a foreclosure notice. Six people participated in a foreclosure prevention workshop at Northwest Community Centre, Pine Hills, hosted by Orlando city. City Commissioner Daisy Lynum said that “something is very wrong”. Everyday she gets a call about somebody in the foreclosure net.

Although the foreclosure crisis cut across all socio-economic divides, the black community has been badly hit. This is because their ownership of houses has been always proportionately less and the equity is an important source of income for those who do have houses of their own. The income of Afro-Americans is one tenth of the Whites. If the source from house equities is deducted then it comes down to less than 1%. In Orlando city about 47% of the Afro-Americans are house owners. This is in sharp contrast to 74% of White owners. For the former this has a special significance. For the Blacks property is the only basis of wealth, as they do not have a family “business to pass on to the next generation” said Lynum.

In a recent study conducted by the Economic Policy Institute it has been noted that the average income of an Afro-American is $11,800 as compared to $118,300 of a White American. After deducting house equity the Black has $300 in net assets while the White has $36,100.

Christian Dorsey of Economic Policy Institute in Washington D.C. says that it is wealth that allows for “purchase of education”, the moving into a larger house and the providing for a safe haven after retirement. The average figure of $300 highlights the low income of the Blacks with no savings, insurance, retirement benefits or investments. But they may be riddled with car loans and credit card dues amounting to negative figures.

The gap in economic status between the Blacks and Whites has increased just at a time when Blacks were struggling to catch up. In 1992 the wealth of a black family was 16% of a White unit but in 2004 it had fallen to 2004. The present mortgage crisis is likely to widen the gap as now the Blacks are lining up to lose their houses. The sub-prime loans had made it possible to increase house ownership among the Blacks but now foreclosures are guzzling up all gains and reversing trends.