Washington, DC— Senate Majority Leader Harry Reid and Senator Debbie Stabenow held a press conference with civil rights leaders today to discuss the devastating and disproportionate impact the housing crisis has had on the African-American community. High-cost subprime loans account for 55 percent of loans to African-Americans.
The Foreclosure Prevention Act—which Senate Democrats have introduced to help struggling families keep their homes, help others avoid foreclosure in the future, and help communities recover from foreclosures and plummeting property values—will provide badly needed relief to the African-American community.
“Our current economic downturn is hurting all Americans, but it is hurting African-Americans particularly hard,” Reid said. “Democrats are committed to addressing the housing crisis and to helping families threatened with foreclosure stay in their homes – it is the right thing to do for struggling homeowners and the right thing to keep communities afloat. We are asking for Republicans to work with us. Every day they delay is another day Americans continue to suffer; every day they stand in the way is another day Americans wonder if they will be able to stay in their homes.”
Said Stabenow: “Too many middle-class families across our country are faced with the prospect of losing their home – their piece of the American dream. This crisis is devastating entire communities and regions. We can and must do more to help. That’s why Democrats have put forward the Foreclosure Prevention Act. This legislation has clear goals and offers real solutions to the crisis facing our nation. By working together we can and will save the American dream.”
“As the crisis deepens and foreclosures escalate, it is everyone’s problem,” said Wade Henderson, President of the Leadership Conference on Civil Rights. “But it is minority homeowners who have been the hardest hit. Many troubled mortgage lenders have resorted to bankruptcy protection in the past year and troubled homeowners should be able to do the same.”
“The National Urban League’s Homebuyer’s Bill of Rights seeks to increase support for struggling homeowners especially since the sub prime mortgage crisis is hitting African Americans particularly hard,” said Stephanie Jones, Director of the National Urban League Policy Institute. "We continue to urge both the Senate and House to create concrete and comprehensive proposals to get our urban communities back on track and close the equality gaps.”
“We are pleased that the Foreclosure Prevention Act incorporates some of our recommendations,” Jones continued. “We urge the Senate and House to take prompt and comprehensive action to address the subprime mortgage crisis that is hurting so many African-Americans and to help ensure that all Americans can build economic security and strong futures.”
Minorities Are More Than Three Times as Likely To Hold High-Cost Subprime Loans. According to one recent study, people of color are more than three times more likely to have subprime loans: high-cost loans account for 55% of loans to African Americans. [United for a Fair Economy: State of the Dream 2008]
Even Though They Received the Majority of Subprime Loans, The African American Community Continues to Lag in Homeownership. According to a 2007 Report by the National Urban League, homeownership among African Americans is substantially lower than among whites, 47.9 percent compared to 75.8 percent. [National Urban League State of Black America, March 2007]
African American Borrowers Will Lose Tens of Billions Over Subprime Loans. According to a recent study, all subprime borrowers of color could stand to lose between $164 billion and $213 billion for loans taken during the past eight years. African American borrowers could stand to lose between $72 billion and $93 billion, while Latino borrowers will lose between $76 billion and $98 billion for the same period. [United for a Fair Economy: State of the Dream 2008]