The National Consumer Law Center (NCLC) issued a new report examining the fair housing implications of the mortgage lending crisis. The report, entitled “Why Responsible Mortgage Lending Is a Fair Housing Issue,” notes:
The historic legacy of redlining contributed materially to the subprime boom and bust, as subprime lenders and brokers flooded African‐American and Latino communities where credit was scarce. Because these communities had been starved for credit for generations, the predatory lenders found easy prey during the boom years. And because the existing historical and intergenerational wealth gap meant that a larger percentage of the wealth of African‐American and Latino families was concentrated in their homes, the bust hit these families particularly hard.
The boom and the bust widened the wealth gap: the median wealth of white households is now 20 times that of African‐American households and 18 times that of Hispanic households. In 1984, by comparison, well before either the boom or the bust, the ratios were 12:1 for African‐Americans and 8:1 for Latinos.
Click here to read the full report.