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Housing Tue Mar 30 2010
The Chicago Reporter's editor, Kimbriell Kelly, provided testimony to a joint state and city hearing convened by the Latino Policy Forum and Spanish Coalition for Housing yesterday detailing the Reporter's research on home foreclosure's in Chicago's neighborhoods. Kelly's testimony is a challenging reminder of the depth of the crisis and the long-term ramifications for Chicago's neighborhoods of dysfunctional financial regulations--and not just for homeowners, for renters, as well.
A small portion of her testimony follows; follow the link above, as the text provides links to sources:
Much of the foreclosure crisis that we're seeing stems from subprime lending. Back in November 2007, we broke a story that the Chicago metro area led the nation with the most high-cost loans. We analyzed millions of records from the federal Home Mortgage Disclosure Act and found that it was the third consecutive year that the Chicago area held this distinction. Minorities carried the greater burden. Combined, African American and Latino homeowners received nearly 50 percent of all high-cost loans in 2006 compared to nearly 22 percent of prime-rate loans.
Subsequently, many homeowners tried to refinance their mortgages. In 2008, we analyzed refinance data and found that people were successful just 47 percent of the time. White and Asian borrowers fared the best, though black and Latino homebuyers in 2006 had higher rates of high-cost loans. The approval rate for white people was 75 percent, 72 percent for Asians, 59 percent for Latinos and 54 percent for black borrowers.
The end result wasn't surprising. In 2008, 65 percent of all foreclosures in Chicago were in majority-minority census tracts, according to a 2008 report published by the Chicago-based National Training and Information Center.
Homeowners weren't the only ones impacted. Between 2006 and 2007, a year after the housing crisis began, the number of small buildings that foreclosed more than doubled, to 2,497. The city's predominantly black South and West sides were hardest hit. In black communities, the rate of small-apartment-building foreclosures was 20 times higher than the rate in white communities; it was three times higher than the rate in Latino communities. We estimated that anywhere between 13,000 to 18,300 rental households could have been affected in 2007.