The document discusses the racial wealth gap in the United States, particularly regarding home equity. It notes that before the foreclosure crisis, whites held on average $9 in assets for every $1 held by African Americans, with much of this gap explained by differences in home equity. It then discusses how predatory lending practices targeted minority communities through refinance loans and exploited underserved markets, leading to disproportionately high foreclosure rates among African Americans and Latinos and tremendous loss of wealth in those neighborhoods as a result.

1. Reducing the Racial Wealth Gap in the Wake of
Foreclosures: What is the Role of Affordable
Homeownership Programs?
Pre-Conference Workshop with Community Leaders
Christy Rogers
The Kirwan Institute for the Study of Race and Ethnicity
September 23, 2010
Chicago IL

2. Home equity and the wealth gap
(pre-foreclosure crisis)
 For every $1 in assets held by African Americans, Whites hold $9
 This disparity is primarily due to differences in home equity
Source: “Net Worth and Asset Ownership 1998-2000”. Household Economic Studies. U.S. Census Bureau (2003)

3. Source: Barry Zigas, CFA Comments “Public Input on Reform of the Housing Finance System” July 20, 2010.

4. Adapted from “Changes in U.S. Family Finances from 2004 to 2007: Evidence from the Survey of
Consumer Finances.” Federal Reserve Board, Survey of Consumer Finances, February 2009. Page A37.

5. EXPLOITING
UNDERSERVED
MARKETS
(Reverse Redlining)

6. Did you know…?
 CRL estimates that from 1998 – 2006, only 9% of all
subprime loans went to first time homebuyers
 Majority were refinance loans
 Refinance loans disproportionately marketed to African
American neighborhoods
Photo and story credit:
Baltimore Finds
Subprime Crisis Snags
Women
--New York Times
1/15/08

8. Foreclosure rates by race

9. Wealth loss in communities of color
 Property depreciation in communities of color related to
foreclosures between 2009 and 2012:
 African American neighborhoods: $194 Billion
 Latino neighborhoods: $177 Billion
 …and foreclosures continue…