The Foreclosure Crisis and Its Impact on Communities of Color: Research and Solutions
Washington, DC — As the foreclosure crisis continues unabated, destroying wealth for American families and undermining the stability and vibrancy of communities, NCRC’s recent whitepaper serves as an in-depth investigation of the success and weaknesses of the major federal and private foreclosure prevention efforts. The paper also examines proposed solutions to rebuild the homeownership markets. The paper has a particular focus on the impacts of the foreclosure crisis on people and communities of color.
The report addresses three critical aspects of the foreclosure crisis:
First, the foreclosure crisis is disproportionally affecting communities of color, and continuing without any meaningful preventative intervention. The homeownership rates for communities of color are at their lowest levels in over a decade. It is expected these rates will drop even further, which would wipe out over 15 years of gains in homeownership rates for people of color. The combination of foreclosures and falling home prices has also resulted in a catastrophic loss of wealth, in particular for people and communities of color.
Second, there are several strategies and solutions that could significantly halt the foreclosure crisis, as well as repair the damage, but no policies are actively being debated by policy makers. There are no signs that the HAMP program will be significantly improved to have a greater foreclosure prevention impact and, given the current political climate, it seems unlikely that any additional funds for new foreclosure mitigation efforts will be forthcoming. Finally, many proposals to rebuild the homeownership market would actually further undermine the housing markets.
Third, there is no national clearinghouse of information on foreclosures that is systematic, searchable, and comprehensive. A comprehensive clearinghouse of data and research would enable more effective responses to the damage that is occurring to families and communities by the foreclosure crisis. Without a central hub of information, it is also difficult to understand the long-term damage the foreclosure crisis will likely have across cities and communities.