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Washington, D.C. – America’s foreclosure crisis disproportionately affected America’s low-wealth and minority families because of structural factors in the housing finance system, UNC Center for Community Capital Director Roberto G. Quercia told participants at the 2011 Color of Wealth Policy Summit held April 6-7 in Washington, D.C.

A study of Latino families who had faced foreclosures documented not only the financial costs but also the human and social costs, such as marital discord, anxiety, depression, children’s poor performance in school, financial loss and strained relationships between parents and children, Quercia said.

“We know from our research that, even with low down payments, fixed-rate mortgages are sustainable when properly underwritten, serviced and supported by the appropriate secondary market functions,” Quercia said. “We must address the structural factors that perpetuate and worsen wealth gaps across racial and ethnic groups.”

Quercia was among the featured speakers at “The Recession Generation: The Racial Wealth Gap and Restoring Prosperity.” The two-day summit featured panels of researchers, community practitioners and policy advocates engaged in discussions about the growth in the wealth gap between white American families and those of color, the impact of the decline in wealth on children of color, and strategies to promote greater access to prosperity.

Quercia discussed findings from a 2010 study conducted for the National Council of La Raza on the experiences of Latino families forced to leave their homes due to a foreclosure. The center conducted in-depth interviews with 25 families to understand the circumstances that led to the foreclosure and the impact it had on family relationships and health, children’s behavior and performance in school, and the family’s perception of the American Dream.

The study revealed that most families experienced a “pile-on” effect in which multiple triggers contributed to the foreclosures, such as health emergencies, resetting of mortgage payments and loss of income. None of the families received significant assistance from mortgage servicers to avoid foreclosure.

Families reported an average loss of nearly $90,000 in equity, lost repair and improvement investments, credit card debt and depleted retirement and college funds, which also devastated their credit scores. Most of the families reported turning to public assistance to meet food, medical and other needs.

View Quercia’s presentation.

Mortgage finance is a key area of study for the UNC Center for Community Capital, the leading center for research and policy analysis on the transformative power of capital on households and communities in the United States. Part of the College of Arts and Sciences at the University of North Carolina at Chapel Hill, the center offers data and analysis that helps policymakers, advocates and the private sector find sustainable ways to expand economic opportunity to more people more effectively. For more information, visit or call (919) 843-2140.

Topics(s): Affordable Homeownership, Default, Bankruptcy, & Foreclosure, Mortgage Finance
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