Foreclosure prevention measures, data collection, and reporting must be prioritized to stave off preventable foreclosures Communities of color in the United States, especially Black and Latinx communities, are particularly hard hit by the COVID-19 pandemic, from higher rates of illness and death to greater rates of unemployment, mortgage default and eviction risk. These challenges have exacerbated the loss of wealth due to predatory lending, foreclosure, and the economic crisis of the Great Recession a decade ago.
Early data indicate that disproportionately high percentages of African American and Latinx homeowners have faced economic hardship and sought assistance from their mortgage companies. Consistent with these developments and even more concerning, the U.S. Census Bureau’s Household Pulse Survey, as discussed in the next section, shows that among households who have fallen behind on their mortgage payments Black and Latinx households are much less likely than white homeowners in the same position to access potentially home-saving relief.
This disparity is greatest for Black families. Black communities have yet to recover from the rampant foreclosure of the Great Recession. As of the first quarter of 2020, the Black homeownership rate is 44% compared to 74% for whites. This is a slight increase from the last quarter where the rate sunk to 40.6% a level not seen since the 1960s. The looming foreclosure crisis threatens to decimate Black homeownership and destroy wealth for generations.
Homeowners of color, particularly Black and Latinx homeowners, will face disproportionately high foreclosure rates in the coming months and years unless substantial foreclosure prevention measures are adopted immediately. Targeted data collection and reporting requirements also must be instituted to provide transparency and accountability and to promote sustainable policy development.
Our nation must not repeat the tragic consequences of the previous housing crisis that destabilized communities burdened by redlining, discrimination, and disinvestment.