Ferguson shows failed US policy and the black–white housing gap
By Andre F. Shashaty
Special to the JA from New America Media
On the surface, the unrest in Ferguson, Mo., was about local police using deadly force on an unarmed young man. But on a deeper level, it reflected the increasing poverty and economic decline that affects ethnic communities all over America.
Despite rosy reports in the media about the end of the national foreclosure crisis and the recession that followed, all is not well in our inner cities and suburbs with largely minority populations, like Ferguson.
The foreclosure crisis was hard on many Americans, but it was a disaster for communities of color, including the citizens of Ferguson.
Half of Ferguson Homes Underwater
In the zip code that encompasses Ferguson, half (49 percent) of homes were underwater in 2013, meaning the home’s market value was below the mortgage’s outstanding balance. This condition
(also called “negative equity”) is often a first step toward loan default or foreclosure, according to the recent report, “Underwater America,” from the Haas Institute for a Fair and Inclusive Society at the University of California, Berkeley.
Mortgage lenders targeted predominantly black and Hispanic areas for the highestrisk, highest–cost types of mortgage loans, such as adjustable–rate mortgages and loans with high prepayment penalties. This led to higher–than–average default rates, according to the Housing Commission established by the Bipartisan Policy Center in Washington, D.C.
Many of the families that were sold risky mortgages had good credit, decent incomes and everything else necessary to qualify for traditional long–term, fixed–rate loans. Yet, they were not offered those kinds of loans, but instead “steered into exotic and costly mortgages they did not fully understand and could not afford,” the commission said.
This “deliberate targeting of minority areas for the sale of risky and expensive
See Housing on 13A