The survey controlled for “trigger events” that increase the likelihood that homeowners will lose their homes, including divorce, death, or job loss. (And more mundane factors, such as when a kid leaves home for college.) [Researchers Gregory] Sharp and [Matthew] Hall also accounted for homeowners who developed disabilities. The study found that about six percent of the sample transitioned from homeowners to renters. But black homeowners experienced an exit rate 68.2 percent higher than white homeowners. Although racial differences in trigger events were “minimal,” the report said, black homeowners were nevertheless more likely to “see their households shrink, to lose their jobs, and to suffer from substantial income losses” than white homeowners. So, even accounting for events that can lead to downward life trajectories, African Americans were much more likely to lose their status as homeowners – suggesting they are more vulnerable and subject to predatory, exploitative, and racially motivated lending practices.
Jamelle Bouie elaborates:
In addition to showing the consequences of past discrimination, Sharp and Hall argue that African-Americans have been victimized by a new system of market exploitation. Banks like Wells Fargo steered blacks and other minorities into the worst subprime loans, giving them less favorable terms than whites and foreclosing on countless homes. In a 2012 lawsuit, the ACLU and National Consumer Law Center alleged that the now-defunct New Century Financial, working with Morgan Stanley, pushed thousands of black borrowers into the riskiest loans, leaving many in financial ruin. As early as 2005, the Wall Street Journal reported that blacks were twice as likely to receive subprime loans. And in a New York University study published last year, researchers found that black and Hispanic families making more than $200,000 a year were more likely to receive subprime loans than white families making less than $30,000.
Together, all of this means that – according to Sharp and Hall – African-Americans are 45 percent more likely than whites to lose their homes.