The racial back-and-forth since Sen. Hillary Clinton and Sen. Barack Obama left the "prodigious hilltops of New Hampshire" is a reminder that the Rev. Dr. Martin Luther King Jr.'s dream that his "four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character" is still just that: a dream.
To commemorate Dr. King's actual birthday, United for a Fair Economy, a nonpartisan economic justice organization, has released "Foreclosed: The State of the Dream 2008," a report on the subprime mortgage crisis that has turned the American Dream of homeownership into a nightmare.
African Americans disproportionately rely on subprime mortgages, which are made to borrowers who do not qualify for a fixed-rate mortgage due to their weak or limited credit histories. Subprime lenders offer low-interest "teaser" rates that reset to higher adjustable mortgage rates.
According to United for a Fair Economy, the subprime mortgage crisis will lead to a net loss in black homeownership. The bottom line: The subprime crisis "will cause the greatest loss of wealth for African Americans in modern U.S. history."
The report's key findings include:
Our estimates indicate that it will cause the greatest loss of wealth for African-Americans in modern US history.
People of color are more than three times more likely to have subprime mortgages.
Blacks, who represent roughly 13 percent of the U.S. population, got 54.7 percent of all subprime mortgages issued nationwide.
The total loss of wealth for people of color is between $163 billion and $278 billion for subprime loans taken out since 2000.
African American borrowers will lose between $71 billion and $122 billion.
It will take 594 years to close the racial gap in median household net worth.
At the 11th annual conference of the Wall Street Project, Texas state Sen. Rodney Ellis said: "People who thought they had moved on up now find they are moving out."
But the subprime mortgage crisis is more than a family crisis. The increase in foreclosures depresses property values, and lowers local and state revenues. Black neighborhoods are particularly vulnerable given the concentration of subprime mortgages. So, cities, including Baltimore and Cleveland, have filed lawsuits to recover the additional maintenance, police and other costs associated with vacant houses.
Investigations are also underway in Illinois and New York over allegations the subprime mortgage crisis was triggered by white-collar crimes. Indeed, the Rev. Jesse L. Jackson, Sr., founder and president of the Rainbow PUSH Coalition, has called for a congressional investigation on the "subprime crime crisis" that is "consuming the global economy."
IT'S A CRYING SHAME THAT THE HOUSE MARKET IS THE WAY IT IS TODAY. WE HAVE PURCHASED 4 HOMES DURING OUR LIFE TIME AND NOW WE TO ARE STUCK ON A PRE PAY PENTALY LOAN. I FEEL THAT IF THE IDIOT LOOK AT IT IF A CONSUMER IS WILLING TO HAVE OWNERSHIP OF A HOUSE THAT WE ARE WILLING TO PAY THE HIGH ASS INTREST RATES TO GET A HOUSE WHAT DO THEY THINK WOULD HAPPEN IF WE WERE TO GET LOWER FIXED INTREST RATES. WE WOULD ALL BE ABLE TO KEEP OUR HOMES AND BOOST THE ECONOMY IN DOING SO. ALSO THEY NEED TO NOT JUST CUT INTREST RATES THEY NEED TO RAISE THE DEBT TO INCOME RATIO'S WE WERE DIQUALIFIED BY BEING OVER 2% FROM REFINANCING ON A 30 YEAR FIXED 6% INTREST RATE. ANOTHER(FYI) TO KEEP YOU FROM BEING SCREWED BY YOUR CURRENT PRESIDENT THEY NOT GOING TO TELL YOU THIS BUT YOUR REBATE THEY ARE CONSIDERING WILL BE DEDUCTED OUT OF YOUR 2009 TAX REFUND.(EXAMPLE) SAY BUSH GIVE YOU A REFUND IN JUNE FOR 1,200. AND NEXT YEAR YOU FILE YOUR TAXES AND YOU SUPPOSE TO GET A REFUND OF 1,400 BACK WELL BECAUSE YOUR BRILLIANT PRESIDENT GAVE YOU A REFUND IN 2008 OF 1,200 YOUR REFUND NOW WILL BE 200.00 BECAUSE ALL HE;S DOING IS ADVANCING YOU ON YOUR 2009 TAXES SO DO BELEIVE THE HYPE. WE WILL PAY LATER.
I think the blame is primarily on the lenders and brokers. Yes, people need to be educated about the home buying process and all that it entails. However, lenders and brokers have a responsiblity to their clients to ensure they are providing them with accurate information. In the subprime market this does not happen. If this were the case more lenders and brokers would have recommended FHA loans to these folks. These loans are insured by the gov't and don't require good credit or large down payments. But lenders and brokers don't make money off FHA loans. Greed was a primary cause and effect for creating the subprime mess.
To #11. Good for you. Kudos even for buying your first home. But to add some perspective it was far easier for someone living where I live (San Fran Bay Area) to get a subprime loan than to come up with $120,000 (20%) downpayment for a house in this area where the avg. house costs $600k. If you are single and make $88k a year, you're considered low-income based on FHA standards. This is a national problem that will impact US ALL. It's already caused one Bay Area city (Vallejo) to file bankruptcy.
I feel that the housing builder put themself in this problem by raising the price of homes way to high gread playes a big part in this and the people should not have brought houses and let them fall the builder i means in the 80 they did this with the SNL but this time they were trying to move black people out there neiberhood and over price the homes and now it is going to crash and more people are going to loese there home i feel for them but you were the dumm one that brough at that price to me you should loese your home and next time wait them out they will come down soon then later like now if you had waited you would have saved houndreds of thousand of dollars and no you are going to loese your home wait next time. For black people we need to stop running behine white people and get i own together first til then there is no dream to come.
I too purchase a home in 05, 0 interest loan, 2 year arm. my housenote just went up almost $ 600 dollars per month. I have learned a very expensive life lesson. If it don't feel right, don't do it. I did not educate myself in regard to the loan i received. thank god for my family helping me to keep my home. I tried to refinance and was told that i now owed more than the value of my house and in order to refinance i would have to put down a hefty sum. If you purchase a home, read all the fine print and beward of fast talking lenders.
WELL I AM GOING TO SAY THIS IS A SHAME AND I DO ME SHAME NOW HERE IS ALL THE LENDERS AND I AM NOT PUTTING THIS ON THEM BUT THEY THE LENDERS COULD HAVE STOP ALL WHEN MYSELF AND MY WIFE SOLD ARE 1ST HOUSE AND GET ANOTHER ONE WE HAD TO DO A LOT OF WORK I MEAN THE LENDER DID ALL KINDS OF CREDIT CHECKS I WAS PISS BUT ANYWAYS I LEARN FROM THE 1ST HOUSE TO GET A FIX SO I KNOW WHAT I HAVE TO PAY EACH MONTH SO I WILL TELL ANYONE TO GET A FIX AND IF YOU CANNOT THAN WAIT BECAUSE WHEN CREDIT IS MESS UP IT IS HARD TO FIX IT SOME FOLKS IT DOES NOT MATTER BUT YOU KNOW FOR OTHER FOLKS IT WILL TAKE YEARS TO FIX SO LEARN FROM THIS EVEN ME THE GAME OF MONEY IS NOT FAIR SORRY FOLKS
I think people should take the time to thoroughly research mortgage lenders, and educate themselves on exactly what they are getting into, before purchasing a home. For most people, a home is the single largest and most important purchase that they will make in their lives. If it takes hiring a lawyer or getting some other type of advice, assurance, from someone who has the experience to let them know upfront what they are getting into, then that's what they need to do. KNOWLEDGE IS A POWERFUL THING! Don't get me wrong, buying a home is a wonderful thing; but educate yourself first about interest, fixed, adjustable, & short term rates before buying it. Some people are out only for the money; & really don't care how it affects you. Bottom line - Don't be led around by your nose, do your homework, know your stuff, and make an educated choice, before making a serious purchase like a home.
First of all don't blame these 1st time buyers, blame the brokers, leders etc. Homebuyers are not aware of all these differet types of loans, but the brokers, lenders etc. have had some type of extesive training ad they are ALL out to get the most money for themmselves ad not for the homebuyers. They don't care that you won't be able to afford the loan, they were just trying to fatten their pockets. Having a sub-prime loan is not always a bad thing. I work in mortgage and I have seen many people with good credit with sub prime loans. With a sub prime loan, there is less down payments and you don't necessary have to carry a certain type of insurance. If I did not work for the mortgage industry I would have probably been one of those poor people suckered into one of those loans. Some of the blame should come from the homebuyer because that's where you as a person should know your own limits. I purchases my home ad my monthly note is the same as the monthly rent on an apartment. I knew what I was NOT able to afford BEFORE I started looking. Sure I wanted the brand new house on the lake, but in reality, I was not able to afford it, so I settled for less. The agent did try to sell it to me , but I knew better........
For the most part these were adults making the decision on what type of loan and house they wanted to buy and pay for. If they would have taken the time to fully read what the "NOTE" said on these loans they would have known exactly what they were getting into. It reminds me of Smokers now blaming the tobacco companies because they smoked and are now sick. Doesn't the label on the Cigarette pack say Warning Maybe hazardous to your health!. If you are willing to take risk, knowing the risk, don't blame anyone but yourself. With that said READ and maybe you could save yourself the problems later on.
Blame the brokers, realtors, and lenders for supplying false advertisements to homebuyers. I moved to Atl and I can't get work. Anyone I know people that is interested in moving here I tell them quickly not to come here because the job market is really bad.
Find out what members are saying about everyone from Barack to Beyonce. There are nearly 100 forums from which to choose. Click on a category below and discover the right board for you.
Hector Jackson (C), who impersonates the late US pop star Michael Jackson, gestures while he takes part in the "I do dance Thriller" event which attempts to break the Guinness World Record for the biggest mass "Thriller" dance, in Mexico City, on August 29. Up to 15,000 people are expected to take part in a potentially record breaking mass performance of Michael Jackson's famed "Thriller" dance on the day he would have turned 51.
Omar Torres, AFP/ Getty Images
A long line of fire marches west towards the communities of Acton and Sunland-Tujanga on August 31 in Los Angeles, California. At least 18 homes were destroyed and 12,000 more homes and 500 commercial buildings are being threatened in the fire which already took two lives. The wildfire, which broke out Wednesday afternoon near a ranger station and the Angeles Crest Highway above La Canada Flintridge, has forced thousands of evacuations.
Kevork Djansezian, Getty Images
Venus Williams of the United States reaches for a shot against Vera Dushevina of Russia during day one of the 2009 U.S. Open at the USTA Billie Jean King National Tennis Center on August 31, in Flushing neighborhood of the Queens borough of New York City.
Chris McGrath, Getty Images
A Kenyan Muslim child reads verses from the Quran, Islam's holy book, on the fifth day of the Muslim holy month of Ramadan in a Madrassa (Religion School), in Nairobi, Kenya, Wednesday, Aug. 26. Muslims throughout the world are celebrating the holy month of Ramadan, where observants fast from dawn till dusk.
Sayyid Azim, AP
Space Shuttle Discovery lifts off from launch pad 39-A at the Kennedy Space Center on August 28, in Cape Canaveral, Florida. Discovery is scheduled for a 13-day mission to the International Space Station.
Joe Raedle, Getty Images
Host Vanessa Williams performs with dancer Gilles Marini onstage at the 36th Annual Daytime Emmy Awards at The Orpheum Theatre on August 30, in Los Angeles, California.
Jesse Grant, WireImage
A girl plays with tomato pulp during the annual "Tomatina" tomato fight fiesta in the village of Bunol, near Valencia, Spain, Wednesday, Aug. 26. Bunol's town hall estimated more than 40,000 people, some from as far away as Japan and Australia, took up arms Wednesday with 100 tons of tomatoes in the yearly food fight known as the 'Tomatina' now in its 64th year.
Alberto Saiz, AP
Tom Wainaina recounts the events that lead to his being burned over most of his upper body August 26 in the Kibera slum in Nairobi, Kenya. Wainaina was burned by a group of men during post-election violence in Kenya's disputed 2007 presidential election. Ethnic-tribal violence left over 1,000 people dead. The non-governmental organization (NGO) Concern, in cooperation with local Kenyan groups, has launched a campaign to provide the urban poor with cash grants to start a business or get back on their feet after suffering disproportionately from post-election violence in 2007. The money is transferred to the recipients via a mobile phone which insures a safe and simple financial transaction to customers who don?t have bank accounts. Wainaina is one of dozens of Kibera residents to receive the assistance of a cash grant. Hairdressers, grocery stores and food vendors are just some of the businesses that have been financed through the program.
Spencer Platt, Getty Images
People standing near the grave of Senator Robert F. Kennedy (D-NY) look at the grave of Senator Edward Kennedy (D-MA) at Arlington National Cemetery August 30, in Arlington, Virginia. Senator Edward Kennedy (D-MA) was buried yesterday next to his brothers President John F. Kennedy and Senator Robert F. Kennedy (D-NY) after he died of brain cancer on August 25.
Brendan Smialowski, Getty Images
US President Barack Obama takes out his daughters Malia (R) and Sasha (2nd L) and niece Suhaila Ng (L) to shop in the Alleys general store on Martha's Vineyard, Massachusetts, on August 30, 2009.
Comments: (13)
Add a comment
By: J DENISE GARRETT on 1/28/2008 12:23PM
IT'S A CRYING SHAME THAT THE HOUSE MARKET IS THE WAY IT IS TODAY. WE HAVE PURCHASED 4 HOMES DURING OUR LIFE TIME AND NOW WE TO ARE STUCK ON A PRE PAY PENTALY LOAN. I FEEL THAT IF THE IDIOT LOOK AT IT IF A CONSUMER IS WILLING TO HAVE OWNERSHIP OF A HOUSE THAT WE ARE WILLING TO PAY THE HIGH ASS INTREST RATES TO GET A HOUSE WHAT DO THEY THINK WOULD HAPPEN IF WE WERE TO GET LOWER FIXED INTREST RATES. WE WOULD ALL BE ABLE TO KEEP OUR HOMES AND BOOST THE ECONOMY IN DOING SO. ALSO THEY NEED TO NOT JUST CUT INTREST RATES THEY NEED TO RAISE THE DEBT TO INCOME RATIO'S WE WERE DIQUALIFIED BY BEING OVER 2% FROM REFINANCING ON A 30 YEAR FIXED 6% INTREST RATE. ANOTHER(FYI) TO KEEP YOU FROM BEING SCREWED BY YOUR CURRENT PRESIDENT THEY NOT GOING TO TELL YOU THIS BUT YOUR REBATE THEY ARE CONSIDERING WILL BE DEDUCTED OUT OF YOUR 2009 TAX REFUND.(EXAMPLE) SAY BUSH GIVE YOU A REFUND IN JUNE FOR 1,200. AND NEXT YEAR YOU FILE YOUR TAXES AND YOU SUPPOSE TO GET A REFUND OF 1,400 BACK WELL BECAUSE YOUR BRILLIANT PRESIDENT GAVE YOU A REFUND IN 2008 OF 1,200 YOUR REFUND NOW WILL BE 200.00 BECAUSE ALL HE;S DOING IS ADVANCING YOU ON YOUR 2009 TAXES SO DO BELEIVE THE HYPE. WE WILL PAY LATER.
Reply to this Comment | Report This
By: aleach on 3/25/2008 1:01AM
I think the blame is primarily on the lenders and brokers. Yes, people need to be educated about the home buying process and all that it entails. However, lenders and brokers have a responsiblity to their clients to ensure they are providing them with accurate information. In the subprime market this does not happen. If this were the case more lenders and brokers would have recommended FHA loans to these folks. These loans are insured by the gov't and don't require good credit or large down payments. But lenders and brokers don't make money off FHA loans. Greed was a primary cause and effect for creating the subprime mess.
To #11. Good for you. Kudos even for buying your first home. But to add some perspective it was far easier for someone living where I live (San Fran Bay Area) to get a subprime loan than to come up with $120,000 (20%) downpayment for a house in this area where the avg. house costs $600k. If you are single and make $88k a year, you're considered low-income based on FHA standards. This is a national problem that will impact US ALL. It's already caused one Bay Area city (Vallejo) to file bankruptcy.
Reply to this Comment | Report This
By: CHOPITUP on 1/20/2008 8:36AM
IF A PERSON CAN'T AFFORD IT THEY NEED TO WAIT OR THE WILL BE BEAT. ITS NOTHING WRONG WITH WAITING
Reply to this Comment | Report This
By: marshall green on 1/20/2008 9:23AM
I feel that the housing builder put themself in this problem by raising the price of homes way to high gread playes a big part in this and the people should not have brought houses and let them fall the builder i means in the 80 they did this with the SNL but this time they were trying to move black people out there neiberhood and over price the homes and now it is going to crash and more people are going to loese there home i feel for them but you were the dumm one that brough at that price to me you should loese your home and next time wait them out they will come down soon then later like now if you had waited you would have saved houndreds of thousand of dollars and no you are going to loese your home wait next time. For black people we need to stop running behine white people and get i own together first til then there is no dream to come.
Reply to this Comment | Report This
By: Marcus Hankerson on 1/22/2008 1:42PM
I too purchase a home in 05, 0 interest loan, 2 year arm. my housenote just went up almost $ 600 dollars per month. I have learned a very expensive life lesson. If it don't feel right, don't do it. I did not educate myself in regard to the loan i received. thank god for my family helping me to keep my home. I tried to refinance and was told that i now owed more than the value of my house and in order to refinance i would have to put down a hefty sum. If you purchase a home, read all the fine print and beward of fast talking lenders.
Reply to this Comment | Report This
By: kenny.sr on 1/20/2008 8:54PM
WELL I AM GOING TO SAY THIS IS A SHAME AND I DO ME SHAME NOW HERE IS ALL THE LENDERS AND I AM NOT PUTTING THIS ON THEM BUT THEY THE LENDERS COULD HAVE STOP ALL WHEN MYSELF AND MY WIFE SOLD ARE 1ST HOUSE AND GET ANOTHER ONE WE HAD TO DO A LOT OF WORK I MEAN THE LENDER DID ALL KINDS OF CREDIT CHECKS I WAS PISS BUT ANYWAYS I LEARN FROM THE 1ST HOUSE TO GET A FIX SO I KNOW WHAT I HAVE TO PAY EACH MONTH SO I WILL TELL ANYONE TO GET A FIX AND IF YOU CANNOT THAN WAIT BECAUSE WHEN CREDIT IS MESS UP IT IS HARD TO FIX IT SOME FOLKS IT DOES NOT MATTER BUT YOU KNOW FOR OTHER FOLKS IT WILL TAKE YEARS TO FIX SO LEARN FROM THIS EVEN ME THE GAME OF MONEY IS NOT FAIR SORRY FOLKS
Reply to this Comment | Report This
By: Deidra W. G. on 1/20/2008 12:34PM
I think people should take the time to thoroughly research mortgage lenders, and educate themselves on exactly what they are getting into, before purchasing a home. For most people, a home is the single largest and most important purchase that they will make in their lives. If it takes hiring a lawyer or getting some other type of advice, assurance, from someone who has the experience to let them know upfront what they are getting into, then that's what they need to do. KNOWLEDGE IS A POWERFUL THING! Don't get me wrong, buying a home is a wonderful thing; but educate yourself first about interest, fixed, adjustable, & short term rates before buying it. Some people are out only for the money; & really don't care how it affects you. Bottom line - Don't be led around by your nose, do your homework, know your stuff, and make an educated choice, before making a serious purchase like a home.
Reply to this Comment | Report This
By: Anette B on 1/20/2008 1:44PM
First of all don't blame these 1st time buyers, blame the brokers, leders etc. Homebuyers are not aware of all these differet types of loans, but the brokers, lenders etc. have had some type of extesive training ad they are ALL out to get the most money for themmselves ad not for the homebuyers. They don't care that you won't be able to afford the loan, they were just trying to fatten their pockets. Having a sub-prime loan is not always a bad thing. I work in mortgage and I have seen many people with good credit with sub prime loans. With a sub prime loan, there is less down payments and you don't necessary have to carry a certain type of insurance. If I did not work for the mortgage industry I would have probably been one of those poor people suckered into one of those loans. Some of the blame should come from the homebuyer because that's where you as a person should know your own limits. I purchases my home ad my monthly note is the same as the monthly rent on an apartment. I knew what I was NOT able to afford BEFORE I started looking. Sure I wanted the brand new house on the lake, but in reality, I was not able to afford it, so I settled for less. The agent did try to sell it to me , but I knew better........
Reply to this Comment | Report This
By: k on 1/20/2008 3:56PM
For the most part these were adults making the decision on what type of loan and house they wanted to buy and pay for. If they would have taken the time to fully read what the "NOTE" said on these loans they would have known exactly what they were getting into. It reminds me of Smokers now blaming the tobacco companies because they smoked and are now sick. Doesn't the label on the Cigarette pack say Warning Maybe hazardous to your health!. If you are willing to take risk, knowing the risk, don't blame anyone but yourself. With that said READ and maybe you could save yourself the problems later on.
Reply to this Comment | Report This
By: Anonymous on 1/20/2008 4:36PM
Blame the brokers, realtors, and lenders for supplying false advertisements to homebuyers. I moved to Atl and I can't get work. Anyone I know people that is interested in moving here I tell them quickly not to come here because the job market is really bad.
Reply to this Comment | Report This