Over five million US families destroyed their domiciles to foreclosure throughout the Great Recession, with minorities struck particularly hard because of the crisis. Blacks and Hispanics faced foreclosure at a consistent level which was dual compared to white households, based on a 2011 report through the Center for Responsible Lending, with devastating consequences for minority and neighborhoods that are integrated. The resulting destruction of minority wide range erased years of progress at narrowing racial wide range gaps—according into the Pew Research Center, the median white home now has 13 times the wide range associated with the median black colored home (the biggest space since 1989), and 10 times the wide range associated with median Hispanic home (the biggest space since 2001).
A paper that is working earlier in the day this week because of the nationwide Bureau of Economic analysis sheds light on a single component that contributed to those race-driven styles: high-cost loans. The researchers—Patrick Bayer, Fernando Ferreira, and Stephen L. Ross—compared the rates from which minority and non-minority borrowers received high-cost mortgages (popularly known as “subprime mortgages”). (more…)