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Martin Luther King's 'Dream' Foreclosed.

http://news.bostonherald.com
First scooped by sea.tern 754 ago | 1 Comment

The subprime-mortgage crisis will cost black and Hispanic homeowners up to $256 billion - the worst financial hit for minorities in modern U.S. history, a new study finds.

“The dream that Martin Luther King Jr. once spoke of has been foreclosed,” Boston-based United for a Fair Economy wrote in a report set for release to coincide with today’s 79th anniversary of King’s birth.

Analyzing previously released research on the subprime meltdown, the report projected blacks will lose $71.5 billion to $121.6 billion on high-cost mortgages taken out in the past eight years. Hispanics will forfeit another $75.8 billion to $128.9 billion.

That’s the “greatest loss of wealth for communities and individuals of color in modern U.S. history,” researchers wrote.

And while the study said the subprime crisis “at first glance seems to have nothing to do with race or ethnicity, (it’s) actually steeped in discrimination.”

The researchers cited previously released government mortgage data showing:

41 percent of blacks and 32.8 percent of Hispanics who bought homes in Boston or five other major cities in recent years used high-cost loans. By contrast, only 6.9 percent of whites used such mortgages.

Blacks got 54.7 percent of all high-cost mortgages issued nationwide, even though African-Americans represent just 13.4 percent of U.S. population.

Even among upper-income buyers, 54.4 percent of blacks and 48.9 percent of Hispanics used high-cost loans. By contrast, just 16.4 percent of higher-income white buyers received such loans.

Still, Denise Leonard of the Massachusetts Mortgage Association rejects the idea that lenders widely discriminate.

Leonard said government figures on race and lending omit key factors like credit scores and loan-to-value ratios.

“I’m not going to deny that there aren’t small numbers of people in all industries who (are biased),” she said. “But I’ve been in this business for 18 years and know so many people who do the right thing.” More »