Lending Discrimination, the Foreclosure Crisis and the Perpetuation of Racial and Ethnic Disparities in Homeownership in the U.S.

For decades the agencies charged with minding the ‘fair credit and lending’ shop turned a blind eye to those (lenders) who pilfered minority homeownership (and consequently minority wealth) by extending mortgage lending products that were, in many cases, unequal to similarly situated non-minority counterparts. Since the 1950s, when the federal government endorsed homeownership policies for minorities, and the 1960s, when antidiscriminatory D9lending laws were enacted, access to fair mortgage credit has been unattainable. Unbridled lending discrimination culminated in massive foreclosures for a disproportionate number of minority homeowners during the Housing and Foreclosure Crisis. Lenders disparately foreclosed upon upper class, middle class and lower class minority homeowners. The effect of these foreclosures widened homeownership gaps between whites and minorities. Foreclosures were more prevalent for minority homeowners regardless of economic class. Lending discrimination, and subsequent forfeiture of homes, undoubtedly altered the perception of the American Dream, and resulted in losses of generational wealth for minorities, furthered racial segregation and prolonged the stagnancy of the real estate market. Unquestionably then, lending discrimination is not a minority problem, but is an American problem. Therefore, agencies with jurisdiction to enforce lending and credit laws must, first, duly enforce these laws and, second, create civil or criminal mechanisms that effectively and finally eliminate unfair lending