America is reeling under a financial crisis of huge proportions but, unfortunately, the strain is being unequally borne by few. The worst sufferers are the Latinos in New Jersey, the single parents in California and elders in Rhode Island. More than a third of these groups have also been burdened with bad mortgages.
In America, the lines of inequality are drawn traditionally by race, age as well as by education. The housing boom and now the catastrophic bust, according to the analysis of the data collected from 2007 Census Bureau, has worsened these conventional gaps.
On the one hand, since the 90’s, the minorities have gained financially and house ownership but on the other things are going in the opposite direction for them. The rate of house ownership of the blacks and Latinos are rapidly falling, said economist Edward Wolff of New York University. He focuses mainly on income and the distribution of wealth in this country.
About 9.5 million households calculating to one out of five in 52 million house owners having a mortgage, spent a minimum of 38% or more of their income (pre-tax) on matters related to mortgage, house tax and insurance. This is one of the groups Fannie Mae and Freddie Mac will zone in on to grant loan assistance. It is not surprising that most of those worst hit by the boom and bust are located in California, Florida and Nevada.
However, in each state, there are certain pockets of foreclosure concentration. In this economic climate, just about anything can trigger it off financial ruin for someone, such as when someone misses a medical bill or has a damaged car.
The analysis by AP shows that the foreclosure weight is unevenly spread out in terms of both geography and demography. Things recently have been moving from bad to worse as well. About 10% of those holding a house mortgage are defaulting for at least a month as compared with 7.5% in 2007 and 6% in 2006.
Less than a third of the Latinos spend 38% of their income on house related expenses. This is in comparison to a quarter of the Asians and Afro-Americans and 16% of the Whites.
Consumer advocates comment that during the boom it was more quick and easy as well as profitable to sell loans to Hispanics because they could not provide income proof; hence they swallowed higher interest rates in the hope of owning a house. Today they are the worst affected by the foreclosure crisis.