As people in the United States of all socio-economic classes worry about financial problems, Latinos are disproportionately getting hit with foreclosures on their properties. Why are Latinos losing their homes to foreclosure at a faster rate than other demographics? The upsurge in subprime mortgages (mortgages with high interest rates and tenuous ethics meant specifically for those with bad credit history) is the main reason that Latinos are increasingly facing the threat of foreclosure. Whereas once Latinos with bad credit would have the option to either come up with cash or not purchase a property, subprime lenders began to target minorities with bad credit, knowing full-well that their customers would barely be able to make the payments. Consumers, never thinking that they would be able to own a home, were lulled by the promises of these lenders. A report by United for a Fair Economy called State of the Dream 2008: Foreclosed offers reasons for the damage, and suggestions for moving forward. Why are Latinos so affected by the fallout from this lending nightmare? Some of the reasons are:
- Lack of understanding about the process to become a homeowner (nearly 4 in 5 are first-time homebuyers and don’t have the collective wisdom of family and friends to guide them).
- The tendency to go with people they know for assistance and if a predatory lender is the only one in the neighborhood, that’s the only recommendation they can get.
- The only choice often is to go with a subprime mortgage or not to buy at all.
- The lack of alternative measures of financial responsibility, such as wiring money to home countries monthly or lengthy histories of rental payments.
- Not having financial information explained in Spanish and not having real estate documents translated into Spanish.
By providing real estate consultations and financial advice in Spanish, real estate agencies and lenders can work to help Latinos avoid foreclosure in the future.
Transpanish offers 10% discount in Real Estate Translations.
