NEW YORK, May 20, 2014 --Although housing markets continue to recover, one out of five American homeowners is projected to be in mortgage default by the end of 2014. Many of these homeowners are single women who experienced risky lending 30 percent more frequently than men with similar financial assets during the housing boom.
New research published by Amy Castro Baker, a recent Ph.D. recipient from the Graduate Center, City University of New York, demonstrates how mortgage markets evolved beyond protective legislation for women to create new forms of inequity in the recent housing crisis - "Eroding the Wealth of Women: Gender and the Subprime Foreclosure Crisis" in the March 2014 edition of the University of Chicago's Social Service Review.
In the early 2000s, single women represented the fastest growing group of homeowners in the United States, but they also experienced higher rates of risky lending than men regardless of financial profile. Single African American women were 259 times more likely to receive a risky loan than white men with similar assets.
"During the recent housing boom, risky lending eclipsed the fixed rate prime market, injecting high levels of risk into the mortgage pool and creating a vacuum of opportunity for lenders and a mirage of opportunity for groups historically excluded from the market," said Baker. "This shift leaves single women, particularly women of color, immersed in a fragmented lending market characterized by high levels of default and foreclosure."
Instead of being denied access to mortgages, women were super-included among adjustable rate loans without a legislative safety net. This leaves single women, and those who depend on them, at risk for eviction, loss of intergenerational wealth and the erosion of a financial cushion that could otherwise protect them as they age.
To date, 20 percent of American homeowners remain underwater on their mortgages, and the Home Affordable Modification Program (HAMP), the Obama administration's key foreclosure relief program, failed to assist more than 4 million homeowners it was originally projected to assist. Despite these trends, HAMP is scheduled to expire in 2014 and 2015. The market and unemployment rates may show steady signs of progress, but these indicators also overlook single women in foreclosure who continue to be locked out of the recovery.
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