New Research Shows Re-Redlining in Five California Cities

RealEstateRama
February 8, 2010

A new report by the California Reinvestment Coalition concludes that banks have failed to prevent foreclosures and instead have fallen back into a pattern of disproportionately high loan rejection rates for applicants of color in the cities of Los Angeles, Oakland, Sacramento, San Diego, and Stockton. The data reveal shocking trends of dispossession, an alarming volume of predatory home loans, and notably low numbers of loan modifications in predominantly black and Latino communities. Kevin Stein, associate director of the California Reinvestment Coalition and the report's author, says, "The data confirm what we have heard from housing counselors and borrowers -- that the banks aren't meeting their commitments to help families stay in their homes, and that this is further destabilizing California communities." The report's key findings assert that lenders flooded neighborhoods with high-cost loans; foreclosures were created by unsustainable loans that disproportionately affected communities of color; lenders failed to work with families; and re-redlining will continue to occur as lenders continue to deny credit to those most affected by abusive bank practices.

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