What Do Foreclosures Have to Do With Civil Rights?
Besides the possibility of incarceration, the legal system poses no more severe threat to an average American than that of the forcible eviction of a person from his or her home. Yet most homeowners either do not seek out legal representation to defend their property or are unaware that homeowners have rights throughout the foreclosure process. The Brennan Center for Justice, to give just one example of a study of the lack of representation in foreclosures, found shocking percentages of homeowners who “lack the ability to navigate the landscape of our lending laws” and who do not seek out representation. Thus, countless homeowners have been deprived of their due process rights to meaningfully assert defenses to foreclosures.
Secondly, empirical evidence supports the idea that communities of color have been more significantly impacted by the rise and fall of the housing market.
How Have Minorities Been Disparately Impacted During The Housing Boom and Bust?
A number of empirical and academic studies show a variety of disparate impacts on minorities and communities of color during all phases of the housing boom and bust. First, while the boom was progressing, much of the subprime lending was concentrated on urban areas, and several academic studies support the idea that subprime lending was particularly rampant in black, hispanic, and low-income neighborhoods.
Secondly, while the housing market was booming, even high-income black families paid higher interest rates than white families. While there are a variety of explanations for this fact, the disparate impact of bank policies cannot be denied.
Thirdly, when the housing market tanked, the negative effects of the downturn were “probably the strongest in poor, urban neighborhoods…when clusters of vacant, neglected properties develop from widespread foreclosures,” according to one study.
So we can say with some definitive empirical evidence that in all phases of the housing market boom and bust, banks and lenders’ practices disparately impacted minority families and communities. The next time you hear a legislator remark that the housing crisis is just about a bunch of “deadbeats,” consider the proven devastating impact that banks’ policies have had on minority communities; Ask yourself, “Is the best policy is to prevent foreclosures at all costs to encourage community stability, or is the best policy is to ‘speed up the process’ of evicting homeowners, thus encouraging more vacancy, crime, and blight?”
On this MLK day, we are forced to ask the following disheartening question: Are those legislators supporting a faster eviction process – without regard to devastating minority neighborhood externalities – speaking just for a privileged, elite investor class and banking lobby, or are they speaking for people residing in communities of every race and class?