Fed Chair: Communities of Color Must be Part of the Recovery
Black Voice News
December 4, 2012
During a recent speech before the Operation HOPE Global Financial Dignity Summit in Atlanta, Federal Reserve Chairman Ben Bernanke warned that the current housing recovery is leaving communities of color behind. "Two types of discrimination continue to have particular significant to mortgage markets," said Bernanke. "One is redlining, in which mortgage lenders discriminate against minority neighborhoods, and the other is pricing discrimination, in which lenders charge minorities higher loan prices than they would to comparable non-minority borrowers." The Fed chair's conclusions highlight recent independent housing research by the Center for Responsible Lending (CRL). Its report, "Collateral Damage: The Spillover Costs of Foreclosures," found that among the 10.9 million homes that went into foreclosure between 2007 and 2011, more than half of the spillover costs were borne by African-American and Latino families - a loss of approximately $1 trillion. As the Consumer Financial Protection Bureau (CFPB) moves toward finalizing key mortgage reforms, CRL is publicly posing an important question: How will these policies affect homeownership opportunities for lower- and middle-income families who bore the brunt of the recent housing crisis?
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