Resisting Foreclosures Together

Women, especially women of color, have been disproportionally affected by getting sub-prime mortgages. Here are some facts:

Women make up 30% of borrowers for mortgages, but are 32% more likely than men to receive sub-prime mortgages, despite slightly higher credit scores (682 versus 675). This disparity occurs across all income levels, with the difference increasing as income rises.
African Americans were twice or more likely to receive sub-prime loans than whites. Additionally, Hispanics were more than three times more likely to receive high interest rate loans than whites in all income ranges. The only group less likely to receive sub-prime loans than whites was Asian Americans.
A study by Wider Opportunities for Women found that older women, particularly older women of color, are more vulnerable to sub-prime loans because of the cumulative effect of lower wages, occupational segregation, and smaller retirement savings. Even with a median retirement income, older women who carry mortgages still fall 20% short of a level that would provide economic security.

For more, check out this fact sheet on the sub-prime mortgage crisis from the National Council for Research on Women.
Some of these women are now facing foreclosure and evictions. So what are we going to do about it?
Well ACORN, one of the biggest community organizing groups in the country, has one answer. They’re setting up networks of people in various parts of the country–starting with New York and extending to 22 other cities–ready to instantaneously mobilize should folks who have been unfairly targeted be forced from their homes. The idea is to get allies and neighbors right to people’s homes when officers are on the way so they can obstruct the forced evictions and get media attention. Read more about the campaign here.
I realize the immediate importance of helping folks stay in their homes, but I’m wondering how we are also going to change the system that got these women (and others) into this vulnerable position in the first place. What organizations–governmental or not–are being strengthened that can serve as watch dogs looking out for sketchy loan officers? Who is setting up financial education opportunities in low income communities where these loan offers prey? And how can women–who are especially interested in having a “room of one’s own”–make sure that we are realistic about what we can afford?
I would love to see this short term activism be balanced out with some big picture strategizing. Anyone know anyone working at the long term level?
Update: Bizarrely, right after writing this post I found out that Obama answered this call directly yesterday with a $275 billion housing plan. Check it out.

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8 Comments

  1. ChristinaM
    Posted February 19, 2009 at 9:58 am | Permalink

    I have one organization for y’all: NACA
    Timing is everything, though. Talk to them about refinance BEFORE you end up in foreclosure. Sooner is better.
    They aren’t actually a mortgage company, they’re an activist organization and so a non-profit.

  2. Brandi
    Posted February 19, 2009 at 11:57 am | Permalink

    I have very ambiguous feelings on the mortgage bailout.
    I think many people are victims of their own greed and/or lack of research. When my husband and I bought our home, we were approved for a house about 3X what we bought, and there’s absolutely NO WAY we could have afforded that house. We probably could have purchased around twice what we did and made it, but we bought well within our comfort zone as far as monthly budget. That’s where personal responsibility does come in for me.
    In that vein, I think community education helping with budgeting is necessary to combat the problem we encountered – loan officers pushing an unaffordable option on consumers. I find neither the consumers nor the financial institutions innocent victims in this whole fiasco.
    What’s really shocking to me is the stat you quoted that women are faced with higher interest rates despite slightly better credit scores. I suppose it shouldn’t surprise me. I know the same thing happens in other lending arenas, but I didn’t realize it was an issue in the mortgage crisis.
    For long-term solutions, I’d love to see a cap on mortgage interest rates. I cannot see how 14% interest is anything except a loan shark, and I’d love the government to cap the interest rate at something lower and more reasonable. I also would like to see regulation on lending. People who borrow and will have mortgage payments more than half their net pay, for instance, should not be approved. That’s not sustainable over the long term.

  3. becca
    Posted February 19, 2009 at 12:07 pm | Permalink

    I agree that the inequity in loans is a problem — same income and same credit rating should qualify you for loans on good terms. But I don’t favor shoring up more loans for people that can’t afford houses, that’s what got us into this mess to begin with.
    But the said under-pinnings of why these subprime loans are diproportionally effecting the low income (who are more likely to be minority or women) is because before the existence of sup-prime loans, home loans weren’t even an option for people in that income / credit range. Lending large amounts of money to someone who has a low paying job and bad credit is a risk, a huge risk. Some will make good on the loans, but many will bust.
    The real answer are programs to get at the root cause — which is women and minorities need the education and opportunity to get higher paying jobs and information on how to be responsible with credit.
    I’m all in favor of laws that limit lenders from making predatory loans, absolutely, though. A cap on the mortgage rate is fine. But in the “new world”, not everyone can or should be able to afford to take out a large home loan. Some of these supprime loans were for $400,000 for families with one $40k income and 4 children and a low downpayment. I mean, that’s craziness.
    Home ownership isn’t a god-given right, itssomething that you should expect to have some responsibility for.

  4. Brandi
    Posted February 19, 2009 at 12:50 pm | Permalink

    “But in the “new world”, not everyone can or should be able to afford to take out a large home loan. Some of these supprime loans were for $400,000 for families with one $40k income and 4 children and a low downpayment. I mean, that’s craziness.”
    I think you’re absolutely right, which is the source of my ambiguity. We don’t personally know anyone going through foreclosure, so I’m only using the examples and statistics I’m getting from various media sources. Many of the examples are of people who shouldn’t have been approved for the loans in the first place. When I see people who make far less than what we make in homes worth 2-3-even 4 times what our house cost, I know they’re a foreclosure waiting to happen.
    They simply cannot afford the home, and I don’t support a $75 billion bailout of those mortgages. In the end, that can’t solve the problem anyway because those people *still* won’t have the income to pay for the homes. That’s why an interest rate cap is a good idea, imo. People can at least make some progress on the principle of their home and not drown in interest. Even then, though, basic budgeting has to come into play.

  5. VicariousRising
    Posted February 19, 2009 at 2:04 pm | Permalink

    The Center for Responsible Lending in Durham, NC does a lot of work to help stop predatory lending practices (responsiblelending.org).

  6. sbyrnes
    Posted February 19, 2009 at 3:13 pm | Permalink

    One quick clarification – the housing plan Obama proposed is actually for $75 billion, not $275. Most of it will come from TARP money (aka the big bailout which passed in the fall). $75 billion is quite a lot of dough, but the banks sure are seeing a lot more. And in fact most of the money in the plan will “incentivize” lenders to restructure mortgages, not go directly to homeowners.
    I work for a nonprofit called Americans for Fairness in Lending (AFFIL) which has been working on these issues for a while, and we’ve got action alerts and so forth on our site: http://www.affil.org. We work with Center for Responsible Lending and NACA, two great orgs which are also mentioned in these comments.

  7. Anthony Hewitt
    Posted February 20, 2009 at 7:10 pm | Permalink

    These people were given more rope than they could use and hung themselves with it. These predators preyed on willing pray, no one made them sign for those mortgages with a gun to their head.
    The American Dream of marriage, house and 2.3 kids. Is just that, a dream.
    Higher taxes are in store for American Citizens, lower marriage rates, globalization, an increase in single homeowners and an aging population means home values will increase slowly. Not to mention the extraordinary high levels of consumer debt, and government debt in America. The people who declare bankruptcy have that blemish on their record for ten years.
    This is the biggest economic crisis since the Great Depression and it maybe at least five years if not more before we fully recover.

  8. Posted April 21, 2009 at 2:21 am | Permalink

    I don’t get this op-ed piece at all. So we have to be wary of eloquence and trust the plain speaking politicians instead? I suppose George W. Bush was that honest, plain speaking regular guy. Look what has happened to our country. War, foreclosures, unemployment, even Fannie Mae has collapsed. I’m going for eloquence this time.

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