Borrowers from racial minorities accounted for a large portion of the U.S. population whose homes fell into foreclosure between 2004 and 2008, according to a report by the Center for Responsible Lending cited by the Daily. Approximately 6.4 percent of mortgages taken out in that four-year period have fallen into foreclosure, and another 8.3 percent of the mortgages taken out during that period are on the brink of foreclosure.
African-Americans and Latinos were more likely to be sold risky loans between 2004 and 2008, the Daily said, making them more inclined to default. Even minority borrowers with great credit scores were more likely to pay higher rates than white borrowers.
Minorities typically had less money for down payments, said Richard Green, director of the University of Southern California Lusk Center for Real Estate, and were more likely to be laid off during the downturn.
“You put all that together and it’s a pretty bad brew,” Green said. “I would be stunned if it weren’t the case that this exacerbated separations in wealth levels.” [The Daily]