Today I was reading about women being the bigger losers in home foreclosures. The New York Times reported (Jan. 15) that in the Belair-Edison neighborhood of Baltimore more than half of the foreclosures in each of the last four years have been homes owned primarily by women. In 2006, women accounted for 40 percent of home purchases in Baltimore and nearly half of their mortgages were subprime.
“Subprime mortgages are high-cost loans, at least three points above the prime rate, made to borrowers with low income or credit scores. The loans make up just 13 percent of existing home loans but account for 55 percent of foreclosure starts, the Mortgage Bankers Association says.
Though women and men have roughly the same credit scores, the Consumer Federation of America found that women were 32 percent more likely to receive subprime loans than men. The disparity existed within every income and ethnic group. Blacks and Latinos are also more likely to get subprime loans than comparable white borrowers.”
One of the reasons given for this was a disinclination among women to negotiate. Also, the subprime lenders targeted this population.
Now before we assume, however, that this happened because the women weren’t well educated or didn’t have good jobs, consider the following:
“Increased homeownership has been the principal means for women to close this wealth gap. But the disproportion of subprime loans, advocates said, makes it harder for women at all income levels to build wealth by paying off their mortgages.”
“’The striking thing is that the disparity between men and women actually goes up as income rises,’ said Allen J. Fishbein, director of credit and housing policy for the Consumer Federation of America. Among high earners — defined as people earning twice the median income — black women are as much as five times more likely to receive subprime mortgages than white men.”
We women need to ask ourselves what happened here? Liz knows about the financial side and I hope will give us some insights to avoid a repeat of this debacle. Maybe they were being “nice girls” to borrow from Lois — too trusting — or not negotiating at the level required as Carol might tell us. But it wasn’t all them. No doubt the answer is a complex interplay of conditions about which women need to know more.
Shouldn’t we also ask ourselves, too, whether the programs proposed by presidential candidates and the Bush Administration are going to harm these women twice? In other words, are these women, many now struggling to keep their homes, going to get help or is the government simply going to throw money at everyone to get the economy going without extra consideration to those who need help most? Are they going to get the help they need negotiating to keep their mortgages? Some help is already being provided, but for many it’s too little too late.
If you’re in an upcoming primary state and you see a presidential candidate, you might want to ask what they plan to do.
Kathleen
TAGS: government help, subprime loans, wealth, women