Barnes sat on a folding chair, waiting to meet with an advocate in the legal services area. "We're here to save our homes," she said. That day, Barnes was one of approximately 830 homeowners to attend the fair organized by the Center for New York City Neighborhoods (CNYCN), the city's de facto foreclosure response team. Like her, the overwhelming majority were people of color.
While the national foreclosure crisis that started in 2007 has receded in New York, it continues to rage throughout many predominantly black and Latino city neighborhoods. Despite a slight dip in the number of properties entering foreclosure citywide at the end of last year, "we still see, by historical standards, very elevated levels of foreclosure activity in predominantly nonwhite neighborhoods in 2010," says Josiah Madar, a research fellow at NYU's Furman Center for Real Estate and Urban Policy.
Foreclosure activity remains highly concentrated in southeast Queens, north-central Brooklyn, and the north shore of Staten Island. According to the Furman Center's State of the City 2010, last year more than 50 percent of properties that were acquired by the foreclosing lender were found in fewer than nine percent of the city's community districts.
A report co-authored by the Manhattan-based Neighborhood Economic Development Advocacy Project (NEDAP) this spring found that, between 2008 and 2009, conventional refinance lending decreased by 14 percent in New York City's neighborhoods of color, while lending in the city's predominantly white neighborhoods increased by more than 110 percent. Difficulty refinancing means distressed homeowners of color may be having a harder time holding on to their homes than distressed white homeowners.
Job market and foreclosure linked
The racial disparities were evident at the fair, and are apparent in the client bases of organizations helping homeowners avoid foreclosures. 75 percent of the clients of CNYCN are people of color, says Michael Hickey, the organization's director.
More and more of those who come to CNYCN for help have "good," fixed-rate mortgages, as opposed to those that derived from subprime loans. But many of them can't make the payments on what are otherwise attractive loans because they lost all or part of their income during the recession, which disproportionately affected people of color. "You look at the neighborhoods where the foreclosure crisis is occurring, and these are communities where there's a large concentration of people connected to the service economy, or to the public sector, both of which have really suffered in the downturn," Hickey says.
Many also find they don't qualify for federal programs designed to help distressed homeowners. "It's very difficult to predict who will be successful in getting a modification because the system is so...full of misinformation and lost documentation and inconsistent responses that two people who look exactly the same may get completely different results from the same bank," says Hickey.
