White Speculators, Black Area Foreclosures

By Gilderbloom, John I.; Squires, Gregory D. | American Banker, September 9, 2011 | Go to article overview

White Speculators, Black Area Foreclosures


Gilderbloom, John I., Squires, Gregory D., American Banker


Byline: John I. Gilderbloom &Gregory D. Squires

Foreclosures continue to decimate communities around the nation, with black neighborhoods being the hardest hit. Some pundits and politicians point to federal policies that encouraged homeownership in low- and moderate-income communities, coupled with reckless behavior on the part of greedy homeowners, as the crux of the problem. One example is the statement by Fox News reporter Neil Cavuto that "loaning to minorities and risky borrowers is a disaster." To the contrary, our recent research demonstrates that it is outside investors living in other, predominantly white neighborhoods, not local homeowners, who account for the adverse impact on our nation's black communities.

Recent foreclosure activity and the subsequent costs are not race neutral. According to the Center for Responsible Lending approximately 8% of African-American and Latino families have lost their homes to foreclosure, compared with 4.5% of white families. United for a Fair Economy has estimated that a third of black households and 40% of Latinos are at risk of falling out of the middle class and into poverty as a result of the foreclosure and related economic crises.

So what accounts for the concentration of subprime lending and foreclosures in minority neighborhoods? The culprit, at least in Louisville, Ky., is investors, primarily white investors who do not reside in the affected communities. In our research we found that in 2007 and 2008 there were approximately 2,000 foreclosure sales each year in Louisville. There were 39 per census tract (a rough approximation of a neighborhood) in black communities, compared with 20 in white tracts. More telling is the fact that there were 15 foreclosures on properties owned by investors rather than owner-occupants in black communities compared to two foreclosures in white areas. A close examination of foreclosed properties in black neighborhoods found most owners were white and often living miles away in suburbs.

It is investors seeking a quick profit, not homeowners, who are the real problem in black neighborhoods. We suspect Louisville's story is not unique. Louisville is right in the middle of this pack, ranking 103 out of 203 metropolitan regions in the rate of foreclosures in recent years.

Several factors account for why a property goes into foreclosure and why foreclosure rates are higher in some neighborhoods than others. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

White Speculators, Black Area Foreclosures
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.