President Bush repeatedly touts high levels of minority homeownership as the pride and joy of his economic expansion policies. Indeed, homeownership amongst minorities reached above 50% for the first time in 2004. But last year black home ownership fell back to 48.8 percent. And according to the New York Times, “neighborhoods with large poor and minority populations in places like Cleveland, Chicago, Philadelphia and Atlanta have experienced a sharp rise in foreclosures, in some cases more than a doubling.”
Experts believe subprime loans make purchasing a home for low-income homebuyers easier at the start but harder to keep. Subprime loans are made available to homebuyers with poor credit histories. They have interest rates that are three points higher on average than the prime rate (about 6.2 percent now) and carry higher fees and prepayment penalties that make it expensive to refinance.
Just last month, Ameriquest, the nation’s largest sub-prime mortgage company specializing in financing housing purchases in heavily minority neighborhoods, settled predatory lending allegations by 49 states, agreeing to pay $295 million in restitution and clean up its lending practices.
Days after the settlement, Roland E. Arnall, Ameriquest’s founder and the largest campaign contributor to Bush since 2002, was confirmed to be U.S. ambassador to the Netherlands.
– Sam Davis
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