Foreclosure's Female Face

BlogHer Original Post

In January, I began a new job at a nonprofit organization that works to prevent foreclosures and preserve neighborhoods throughout New York City. Although I was not involved in the field back in August 2007, I read enough about it to realize that foreclosure was about to have a very female face. Not only that, but it was going to be a face that was likely to be ignored by the mainstream media. Rep. Barney Frank, a strong housing advocate, said that people are lying when they say that they hate to be right, but today that's not the case. The numbers, unfortunately, are bearing out my argument that predatory lending hit women hard.

According to the Center for Responsible Lending (CRL), (which published a report way back in 2004 raising a red flag about how predatory lenders targeted women), the people most severely affected by the mortgage foreclosure crisis today are seniors, female-headed households, Latinos, and African Americans. The numbers are staggering (emphasis mine):

Total Projected Foreclosures in 2009: 2,432,900
Seniors (based on AARP) = 684,000
African Americans (CRL-calculation based on MBA & HMDA stats) = 301,000
Latinos (CRL-calculation based on MBA & HMDA) = 400,000
Women (CRL-calculation based on MBA & HMDA) = 805,000

Total Projected Foreclosures over next four years: 8,100,000
Seniors = 2,276,000
African Americans = 1,004,000
Latinos = 1,332,000
Women = 2,681,000 (excludes women who were co-borrowers)

In case you don't feel like whipping out your trusty calculators, I ran the percentages for you: A full 33% - yes, one-third of all foreclosures in 2009 will impact women; that percentage - 33% - holds steady over the course of the next four years on women who are sole borrowers. Note that women were responsible for 25% of home purchases in 2004, according to Stephanie Mannino at the Thr Cooperator, so the disparity in foreclosure rates says a lot about the types of loans that women were offered. Of course, changes in income due to loss of employment or health issues or other reasons could lead to a woman defaulting on her mortgage. But given that women were disproportionately sold - often through fraudlent means - into exotic mortgages, exploding ARM mortgages, and other nonstable, subprime financial instruments that banks negligently did zero due diligence on, further enabling fraud, I think it is fair to say that foreclosure has a female face. (It's other face, that of senior citizens, came from scams involving home equity loans and other refinance scams that stripped seniors - frequently in low/moderate income and/or minority communities - out of the equity they had built in their homes over decades.)

I don't know about you, but I am really angry. Sure, some of the 2.7 million women facing foreclosure over the next four years made extremely irresponsible decisions and are now suffering the consequences. But given everything that I know about the credit crisis - which was caused by the enormous hunger of investors for new and more exciting mortgage-backed securities, collateralized debt obligations, credit default swaps, and other investment instruments which led to a financial industry that would do anything to meet that demand and the zillions of dollars of profit that supposedly went with it, lax regulatory oversight of an industry that was clearly out of control (and yes, some borroweer greed and stupidity) - the vast majority of women (as well as seniors and people of color) who are facing foreclosure are in this position because of events that are in large measure beyond their control. The predatory actions of the lending industry over the past five years are sickening. (This week's New York Times Magazine cover story, by the legendary journalist Alex Kotlowitz, illustrates how the relentless assault on homeowners and potential homebuyers, as well as the unscrupulous flipping of homes that was unchecked by banks, led people into situations they never dreamed possible.) Again, no matter how greedy a homeowner might have been, none of this would have been possible if mortgage brokers, banks, investors, title holding companies, appraisers, and insurers didn't think there was a fast buck to be made.

The consequences of foreclosure are devastating. Families are dislocated, children are pulled out of school, relationships are strained as people "double up" by moving in with other relatives or friends, leading to overcrowding and stress. Financial stability is devastated as credit scores plunge and any remaining home equity is lost. The neighborhoods left behind are neighborhoods that struggle to retain a sense of community, often fighting an uphill battle with littering, vandalism, theft, and sometimes worse crime.

Foreclosures also devastate social resources and business, sometimes in one fell swoop. As Elana Cantor wrote last week at BlogHer, families relying on licensed child care operated from the home of a qualified provider are losing that resource when "the child care provider's home has been foreclosed,and they have nowhere to run their center." As a staunch supporter and advocate of the need for quality child care, this is my worst nightmare. These women-run business are crucial resources in any community, enabling other parents to work, as well as investing in other businesses through buying supplies and other items. Losing child care to foreclosure is a triple bottom line loss.

At the end of the day, the foreclosure and mortgage crisis is terrifying. The financial industry, which made this mess, have demonstrated zero interest in cleaning any of it up. Whether we like it or not, the pain can't be contained to only those whose "fault" this is. We need to take action as soon as possible to stop the foreclosure tidalwave. CRL has an online petition to sign, asking the Senate to pass a law allowing homeowners to deal with mortgage issues in bankruptcy court, just like investors and vacation home owners are allowed to do - and don't believe the hype that this will stop banks from making loans in the future; the law will not apply to future mortgages, although as the brilliant Tanta at Calculated Risk noted, the legislation's most important impact should be to scare banks into actually using standards to underwrite mortgages is diluted when they don't have to fear judicial modifications, but I'm now just rambling on. (Tanta's work, though, is a must read for anyone interested in understanding the roots of this crisis.)

(If you area woman facing foreclosure, two bloggers have some advice for you: Girls Just Wanna Have Funds and Tax Girl have multiple posts on the topic, although the two linked here are specifically about foreclosure alternatives and their consequences.)

End the foreclosure madness before millions of women are swept away in its aftermath.

Suzanne also blogs at Campaign for Unshaved Snatch (CUSS) & Other Rants. Her first book, Off the Beaten (Subway) Track, is about unusual things to see and do in New York City. To earn good karma (and pay the bills), she works as the Policy and Communications Director at a nonprofit organization created to coordinate and expand foreclosure prevention services in NYC.

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