Latino Communities Hard Hit With Foreclosures

Jan 5th, 2009 @ 6:06 PM by Alden Smith

It is very hard for me to understand how a person can get into a mortgage situation where they just cannot afford the home they are getting into. My research shows me that this is especially true in the Hispanic communities around the nation. I wondered why that was so, certain that there was much more to it than the Latino community making poor decisions. California and Florida are the most obvious, but the statistics provided by a Journal analysis of U.S. Census and RealtyTrac data shows that in U.S. counties where Hispanics account for more than 25% of the population, banks have taken back 6.7 homes per 1,000 residents since Jan. 1, 2006, compared with 4.6 per 1,000 residents in all counties.

This is by no means a reflection on the Hispanic population, but rather a reflection on the greed of mortgage lenders, government entities and organizations which have felt that it was their duty to get the Hispanic enclave into the American Dream. Low-income housing groups, Hispanic lawmakers, a congressional Hispanic housing initiative, mortgage lenders and brokers all helped fuel the fire that brought meltdown to the Hispanic community’s dream of owning their own home. The unethical housing practices that have become so highly visible, such as loans that many times didn’t require down payments, solid credit ratings or documentation of employment threw gasoline on an already troublesome fire.

One person of note in this fiasco is California Rep. Joe Baca. He has long pushed for legislation that would open the doors to Hispanic ownership. Baca is chairman of the Congressional Hispanic Caucus. The caucus launched an initiative called Hogar -or “home” in Spanish. Their goal was to increase mortgage lending to Latinos. Mortgage companies provided funding to the group, and also to the National Association of Hispanic Real Estate Professionals, who put an army of realtors on the streets. The rest is history.

Hogar’s backer reads like a laundry list of failure, including Freddie Mac, Fannie Mae, Countrywide, and Washington Mutual. It is not surprising that Hogar had a large stake in the subprime market. Things were well and good until things started unraveling, and then the bottom fell out, leaving a lot of Latino people out in the cold.

Those helping the Latino community are not serving professionals, but day laborers, janitors, service people, and those that babysit for a lining. These are entry level jobs, and James Scruggs of Northern Virginia Legal Services says that “We see loan applications that are complete fabrications. He explains that every transaction for a mortgage was conducted in Spanish, and then at the closing table, talks were conducted in English.

No one who was concerned with these circumstances could be reached for comment – not Baca, not Hogar or anyone else that was pushing for Latino home ownership. Little is – or can be – done to help this deserving community. It appears to me that our new President has his work cut out for him…

Posted in Mortgage Refinancing, Mortgages
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