People of Color Sacrificed on the Altar of Predatory Capitalism – Color of Law

According to a report by United for a Fair Economy entitled, “Foreclosed: State of the Dream 2008,” the subprime lending debacle is causing the greatest loss of wealth to people of color, primarily African-Americans and Latinos, in modern U.S. history. In dollars, the loss amounts to somewhere between $164 billion and $213 billion over the past eight years.

There is clear evidence that there is racial discrimination (and gender discrimination) on the part of mortgage lenders, those who steer their victims into these horrible loans. People of color are more than three times as likely to have subprime loans. These loans account for only 17 percent of loans to Whites, but 55 percent of loans to Blacks. Given people of similar financial circumstances, Whites are steered into safer, less expensive loans. If subprime loans were distributed equally, losses for Whites would increase 44.5 percent, while losses for people of color would decrease 24 percent. Before this economic crisis, Blacks were 594 years behind Whites in terms of Median Household Net Worth. The subprime crisis will only worsen this gap. And at current rates, parity in home ownership between people of color and Whites will not be reached for another 5,434 years.