While leading economists attempt to find solutions to save financial institutions, many Latinos are still struggling to stay afloat. Congresswoman Linda Sanchez(D-CA) warns that, “The foreclosures all around California neighborhoods represent just the “tip of the iceberg.”The foreclosure rate we are looking at right now equals the rate of the Great Depression.”
These past few days we have seen the nation’s focus return to the economy. Major financial institutions have suffered devastating losses as a result of the sub prime mortgage crisis. While leading economists and those working for the Federal Reserve try to find solutions to ameliorate the woes suffered on Wall Street, it seems there is little mention of the regular Americans who have suffered tremendous losses of during this mortgage crisis.
For many minorities including single women, African Americans and Latinos sub prime mortgages gave them an opportunity to be able to achieve the dream of owning a home for the first time. Many others became victims of predatory lenders and real estate agents. These two factors combined have resulted in high numbers of foreclosure rates among these groups. According to a 2006 study conducted by the Center for Responsible Lending, a research organization and resource on predatory lending, about 40 percent of all sub prime loans nationwide were issued to Latino households. An estimated 5,760 Latino families are projected to lose their homes due to foreclosures this year alone.
Latino members of Congress such as Linda Sanchez (D-CA) have taken notice of how Latinos have been disproportionately affected by this crisis. At a recent National Association for Latino Community Asset Builders (NALCAB) press conference on the foreclosure crisis within the Latino community, she stressed the importance of working harder than ever to prevent financial exploitation of low-income communities of color, particularly during these hard economic times. The U.S. unemployment rate of 6.1 percent is the highest it has been in five years, she says. The foreclosures all around California neighborhoods represent just the “tip of the iceberg,” Sanchez says. “The foreclosure rate we are looking at right now equals the rate of the Great Depression.”
The best way of combating the high foreclosure rate, Sanchez says, is combining new public policy with an education effort that would make low-income communities savvier in financial matters. Two bills recently passed by Congress, the Housing and Economic Recovery Act and the Neighborhood Stabilization Bill, which intend to address the sub prime mortgage crisis and help stabilize local communities, are steps in the right direction, but there’s no quick fix to the foreclosure crisis, Sanchez says.
There are other factors at play that contribute to why Latinos fall prey to predatory lending practices. Language access is an issue for many immigrant families, says Bea Stotzer, Chair of NALCAB’s board of directors. Important bank documents should be translated into Spanish, and stronger penalties for predatory lenders and crooked brokers need to be instituted, Stotzer says.
Linda Sanchez concluded with a statement that could help explain what many feel is a lack of empathy and concern for those losing their homes.” There is this ideological belief among some Congressmen, and I hate to say this, that poor people are poor because they don’t work hard,” Rep. Sanchez says. “Many poor people are the hardest working people in the world, and they pay more for everything, but Congress continues to pass laws that penalize them and reward more irresponsible [high powered corporations].”
[…] Latinos Struggle to Stay Afloat During Sub Prime Mortgage Meltdown By latinovations The best way of combating the high foreclosure rate, Sanchez says, is combining new public policy with an education effort that would make low-income communities savvier in financial matters. Two bills recently passed by Congress, … La Plaza – https://www.latinovations.com […]