Rhode Island Minorities More Affected by Foreclosure Crisis

More people who are minorities have been negatively affected by the foreclosure crisis than Caucasians, according to a report released by DARE (Direct Action for Rights and Equality). It mainly focused on incidences of foreclosures in Providence, which is Rhode Island’s capital.

Foreclosure has taken a heavy toll on this city; many homeowners have lost their homes. Between 2006 and 2012, homeowners in Rhode Island’s capital lost more than 200 million dollars. This was according to a report called Wasted Wealth, which was another report released by Dare or Direct Action for Rights and Equality.

On average, a white homeowner lost $1,700 on a property while a minority, particularly those of color, lost $2700 on average. This is a lot more than the amount white lost on properties that have been foreclosed upon.

Minorities were more likely to lose more based on several factors. A primary reason for this is due to their socioeconomic statuses. Minority borrowers also tend to get targeted by sellers of subprime loans and bad mortgages. Bad mortgage loans are more likely to have bad quality collateral and have to have more risk than regular loans.

Communities where there are more minority groups tend to have loans that have high interest rates, or are unaffordable, sold to them. This is because the companies that tried to sell these bad loans in the first loans failed and find new markets in lower-income areas.

DARE is trying to change this unfair dynamic. For instance, they have been urging the state to protect tenants who rent out units in foreclosed properties. They also want minority homeowners to be treated better than they are being treated right now.

Things in the future will look better for these borrowers once better laws are passed and more protection is granted to them.