Minorities hit hardest by U.S. housing crisis

Minorities hit hardest by U.S. housing crisis
By Dana Ford

LOS ANGELES (Reuters) - In May, Alvin Clavon received a foreclosure notice on the simple, Spanish-style house in South Los Angeles that he shares with his wife and three boys. Clavon bought the place in 2003 with a fixed-rate loan. They painted the walls, fixed the yard and made friends with the neighbors, who let the Clavon boys pick their basil.

In 2005, Clavon worked with a mortgage broker to refinance his home with another fixed-rate loan. But on the night before signing, the family was offered an interest-only, adjustable-rate mortgage. Clavon, a 35-year-old executive assistant at a bank, said he felt stuck. The ball was rolling, he trusted his broker and so the next day, he signed the loan. "Turned out to be the worst thing I could have done," said Clavon, who like so many others in danger of losing their home to the U.S. housing crisis, is African American...

Study after study show that minorities are more likely than whites to get subprime mortgages, which are high-cost loans made to people with poor credit. In its heyday earlier this decade, the subprime market was cheered as an avenue through which historically shut-out borrowers could get loans. That frequently meant minorities. So long as home prices rose, the subprime market seemed a positive example of how to increase home ownership, but as the housing market weakened this year, many began to question whether the loans were fairly priced. In September, the Federal Reserve released a study that found 52.8 percent of African-Americans got a high-cost home loan when they refinanced in 2006, compared to 37.7 percent of Latinos and just 25.7 percent of whites in the same year...

In July, the National Association for the Advancement of Colored People, or NAACP, filed a discrimination suit against 11 of the country's largest lenders, saying minorities are steered toward high-cost loans more often than whites, even after all risk factors are considered. The ACORN study found that high foreclosure rates cause higher rates of crime, lower tax revenue and property values. In other words, whole minority communities, not just individuals, are hurt when houses go under, said Hilary Shelton, director of the Washington D.C. Bureau of the NAACP...

http://news.yahoo.com/s/nm/20071126/us_nm/usa_housing_minorities_dc

Is that how the neighborhood gets turned over for condos? This is just disgusting.