The Alan Sondheim Mail Archive

March 5, 2009


---------- Forwarded message ----------
Date: Wed, 4 Mar 2009 23:08:39 -0500
From: moderator@PORTSIDE.ORG
To: PORTSIDE@LISTS.PORTSIDE.ORG
Subject: Few Safety Nets for Women of Color

Few Safety Nets for Women of Color

Dominique Haoson
Interpress News Service
http://ipsnorthamerica.net/news.php?idnews=2051

UNITED NATIONS, 2 Mar (IPS) - As hundreds of activists
from around the world descend on the United Nations
Monday for a major two-week meeting on women's rights
and equality, the economic crisis here in the host
country is continuing to have an especially heavy toll
on women of colour.

African American women were disproportionately impacted
by the subprime and housing crisis in the United States
that triggered the longer-term global meltdown, and
they continue to be marginalised in the ever more
precarious U.S. job market.

According to the Bureau of Labour Statistics, African-
American women hold just 5.2 percent of jobs in
management, professional and related occupations
(compared to their 6.2 percent share of the U.S.
population), and occupied a scant 3.2 percent of the
board seats in Fortune 500 companies in 2008.

The total African American unemployment rate in
February was 12.6 percent - the highest of any ethnic
group - although in general, men appear to be losing
jobs faster than women.

These issues will be high on the agenda of the annual
convention this summer of the National Association for
the Advancement of Coloured People (NAACP), one of the
United States' oldest and best-known grassroots civil
rights organisations, which celebrated its hundredth
anniversary on Feb. 12.

NAACP Washington bureau director Hilary Shelton told
IPS that "whether young, old or in-between, African
American women have seen major challenges" in the last
several years.

According to the Centre for Responsible Lending, 1.5
million homes were lost through subprime foreclosures
and an estimated 9 to 10-trillion-dollar decline in
U.S. household wealth occurred between 2007 and 2009.

"Nearly two-thirds of the wealth possessed by African
Americans is in the form of home equity," noted
researcher Andrea Harris in last year's National Urban
League report on "The State of Black America."

And "half of all households with children are headed by
women," she added.

African American women "have the highest labour force
participation rate of all women and are roughly just as
likely as their male counterparts to be homeowners,"
thus making them pillars of household stability, Avis
Jones- DeWeever, research director at the United
Council of Negro Women and affiliated scholar at the
Institute for Women's Policy Research, told IPS.

Combined with the fact that "they are more likely to
earn less than both white men and women, have fewer
assets and are five times more likely than men to
receive subprime loans," financial safety nets for
African American women in the current economic crisis
are sparse if not non-existent.

"Work by the Consumer Federation of America has shown
that, in fact, high- income African American women were
nearly five times more likely to have received a high-
cost loan than their white male counterpart," said
Jones- DeWeever.

Although not all subprime loans are predatory - since
borrowers with greater credit risks are charged higher
interest rates - many minorities have been trapped into
subprime loans featuring variable interest rates and
hidden penalty fees that far outweigh their credit
risks.

"We had one woman testify before the Senate who took
out a 20,000-dollar loan. At the end of six years, she
was 110,000 dollars in debt," recalled Shelton.

Both African American and Latino communities were
unfairly targeted by predatory lending for years prior
to the housing collapse. An article titled "Subprime
lenders trick homeowners into expensive loans"
published in the National Housing Institute's magazine
Shelterforce, said that "a September 1999 study
conducted by the U.S. Department of Housing and Urban
Development (HUD) shows that since 1994, conventional,
prime lending to black and Hispanic borrowers has
dropped, and that black borrowers are increasingly
being turned down for prime rate loans in numbers that
far outstrip whites."

The same article states that "studies by Freddie Mac
and Standard's & Poor indicate that 63 percent of
subprime borrowers would have qualified for
conventional 'A' or 'A-'quality loans."

More recently, "over half of all loans made to black
borrowers in 2005 and 2006 were subprime, and African
American women account for 48.8 percent of all subprime
borrowers in 2006," explained Harris.

The adverse effect of subprime lending has rippled into
the older African American and Latino communities.
Older people remain marginalised and receive little
attention.

"To date there have been no studies on how Americans
age 50 and over have fared during the housing and
mortgage crisis," the American Association of Retired
Persons said in a report. The advocacy group found that
"among mortgage holders age 50 and over, African
American and Hispanic borrowers both have foreclosure
rates of 0.51 percent, compared to a rate of 0.19
percent for Caucasians."

Compared to older prime loan holders, older subprime
mortgage holders are "17 times more likely to be in
foreclosure."

Shelton explained to IPS that as African American women
tend to outlive African American men, a trend mirrored
in the general population, "there has been a high
instance of surviving widows who were approached by
unscrupulous lending institutions and brokerages."

In the process of "refinancing their homes [or] doing a
little work on their roof, they found themselves pretty
much losing what they had," she said.

Because of age and limited incomes, recovering from
foreclosure is nearly impossible for those aged 50 and
over.

Nicole Mason, executive director of the Women of Colour
Policy Network (WCPN), explained to IPS that the "lack
of regulations and laws in place to protect people from
predatory lending" and inaccessibility of information
about the home buying process, different type of loans
and interest rates increased vulnerability in African
American and Latino communities "across the board."

"In many African American and Latino communities, prime
lenders and banks weren't even present, which, in my
opinion opened the door for predatory lenders. They
advertised on billboards, radio stations, and help
workshops throughout the community," she said.

The result has been displaced families who have lost
their wealth in the process. Billions of dollars are no
longer there to "pass down from one generation to the
next," "potentially pay for an education" or "for
parents to help their adult children put a down payment
on their dreams," Jones- DeWeever told IPS.

"It's been estimated that this crisis alone represents
the largest loss of black wealth since the
Reconstruction [following the U.S. Civil War]. What we
are witnessing is the financial devastation of
communities of colour in this nation," she said.

If the "tidal wave of foreclosures" is not immediately
stopped, Jones DeWeever said that "within next four
years, they'll be joined by another eight to 10 million
more."

Currently, the NAACP is trying to make more options
available to African American women through education
with their outreach programme and by pushing
legislators to craft policies with greater oversight,
protection and regulations.

_____________________________________________

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