Latino and African American borrowers in California have experienced foreclosure rates 2.3 and 1.9 times higher than those of non-Hispanic white borrowers in the state, according to research released by the Center for Responsible Lending (CRL).
Latino and African American households account for 48% and 8% of foreclosures in the state, respectively. These borrowers were more likely to receive higher-cost subprime mortgages with loan terms that typically increased the risk of default, compared with safer loans made to similarly situated non-Hispanic white borrowers, CRL says.
The report, ‘Dreams Deferred: Impacts and Characteristics of the California Foreclosure Crisis,’ analyzed more than 600,000 foreclosures in the state and also found that over three-quarters of all California foreclosures were on ‘relatively modest’ properties, not ‘McMansions,’ which CRL says is a commonly held belief.
The concentration and volume of California foreclosures also differ dramatically by region, the organization says. The Central Valley and Inland Empire have the highest concentrations of foreclosures, while the volume of foreclosures is highest in major cities, such as Los Angeles.
SOURCE: Center for Responsible Lending