Race and the Mortgage Crisis

Normally, now that I've turned in the grades for this semester (about an hour ago), I'd be blogging my head off for the next week. But what with working on a manuscript I promised a publisher over a month ago AND a statement I'm supposed to be writing for the court on the sociological disaster that school segregation has created here in this parish even AFTER the school system was ordered thirty years ago to straighten this mess out, I wouldn't have much time to blog even if I weren't running off to spend five days in New York City hanging out with my daughter and an artist friend of mine. Still, I gotta do something in this space from time to time or they're going to rescind my blogger's privileges.

So let me start by making a public service announcement: if you're on the verge (or even in the middle) of losing your house right now, check out Neighborhood Assistance Corporation of America's National Save the Dream Campaign. I don't know much about it, but I heard a guy give a little spiel at a public meeting and it looks straight up. They do advising, advocacy, political organizing and more. They even pressured the notorious Countrywide Mortgage Lenders into an agreement that has radically lowered interest rates on thousands of families' mortgages (see above). So if you're in trouble, maybe they can help. The guy swore they routinely pull fat out of the fire with their bare hands, so it might be worth a call to 1-888-302-6222, huh?

What does this have to do with the socially-constructed, political notion of "race?"

"A report released today by the Applied Research Center (ARC), a racial justice think-tank, finds that an inclusive and equitable national economic recovery will require that the country address deep patterns of racial discrimination and disparities. The report, titled 'Race and Recession: How Inequity Rigged the Economy and How to Change the Rules,' found that numerous policies and institutional practices that create racial inequity are among the root causes of the subprime mortgage crisis and economic downturn.

"While several economists and analysts have focused on the 'what' and 'how' questions behind the current recession, an in-depth analysis of income, unemployment, foreclosures, and public benefits brings the largely overlooked 'who' into the analysis: Who were predatory loans targeted towards? Which Americans are losing jobs? The current crisis has brought soaring national unemployment rates, record foreclosure filings, and record lows in the stock market, with global repercussions. However, the most bruising effects have been unevenly distributed -- overwhelmingly to people of color.

"The report examines systemic patterns of racial inequality, including unemployment levels for people of color, which are consistently higher than those of whites and considerably higher during recessionary times. In March of this year, when unemployment reached 8.5% nationally, 13.3% of Black workers and 11.4% of Latinos were out of work, compared to only 7.9% of whites. In contrast, Black unemployment has dipped below 8% only once since 1973.

"Sizeable income gaps between people of color and whites also still persist. Seth Wessler, the report's author and lead investigator, explains that 'Racial disparities in income leave communities of color making about 60 cents for every dollar earned by whites. This huge difference is a direct result of institutional policies and practices that collectively block people of color from opportunity.'

"ARC's analysis of the housing crisis also demonstrates that communities of color were disproportionately saddled with subprime loans at very high rates. Wessler says 'The cumulative effects of historic and current housing discrimination -- including restrictive racial covenants, redlining and neighborhood segregation -- have left people of color with less equity and access to credit, making them prime targets for largely unregulated predatory lending practices. High-cost loans were aggressively marketed in communities of color.' Yet, Wessler says, most troubling is that 'many who could have qualified for prime loans were sold high-cost loans instead - 35 % of subprime loans were sold to people who could have qualified for a traditional, fixed rate, prime loans. And clearly, subprime loans were responsible for the crash.'

"ARC's Executive Director, Rinku Sen, says 'This study reveals that a healthy economy requires explicit attention to ensuring racial equity in our public and private institutions. Thankfully, there are many clear solutions to move us toward fair policies and shared prosperity.'

"The report recommends the use of Racial Equity Impact Assessments, modernization of the Community Reinvestment Act, a moratorium on foreclosures, a lifting of time limits in Temporary Aid for Needy Families, expunging past criminal records, protections for immigrants, passing the Employee Free Choice Act, raising the minimum wage, establishing universal healthcare and the full enforcement of anti-discrimination laws."