Study Shows Foreclosure Crisis Had Considerable Racial Dimensions

10.04.10 | FL News Team

A new study argues that racial segregation played a significant role in the nation's foreclosure crisis.  The study, by two Woodrow Wilson School scholars, looked at the housing bust.  The authors contend that residential segregation created groups of clients who were sold risky subprime loans, disproportionately affecting blacks, and to a lesser extent, Hispanics.  In compiling the data, researchers looked at the 100 largest metropolitan areas.  The study is published in the October issue of the "American Sociological Review."
 
Woodrow Wilson School's Henry G. Bryant Professor of Sociology and Public Affairs, Douglas Massey, said number crunchers have been quick to acknowledge that the foreclosure crisis struck minority communities much harder than others, but they've missed the bigger point.  Massey said experts are, "quick to attribute this outcome to the personal failures of those losing their homes -- poor credit and weaker economic position."  Massey added, "something more profound was taking place...institutional racism played a big part in this crisis."