As some noted yesterday in the comments to my post, these trends should not be surprising.  Communities of color in Chicago and across the country have been devastated by the foreclosure and economic crisis.  They have seen disproportionately high concentrations of foreclosure activity which affects neighborhood property values and likely puts a substantial portion of non-delinquent homeowners  underwater.  Areas with high concentrations of foreclosure activity are also going to see higher levels of distressed sales (properties that are sold either during the foreclosure process as a short sale or after the completion of a foreclosure as a lender-owned property).  The prices of distressed sales are often below market value and can affect appraisals.  In areas where the only sales are distressed, it is difficult for lenders to assess the true value of a non-distressed property for a refinance loan, making lending in these communities more challenging.  In addition, we know that communities of color have disproportionately high levels of unemployment; that large quantities of wealth have been extracted from these communities through payday lending, predatory mortgages, and other costs associated with the fringe financial system; that a higher percentage of people in communities of color have low or no credit scores; and that many people in these communities have overwhelming levels of debt.

A lot of Woodstock’s work revolves around documenting these challenges because, without evidence and data showing their scale, distribution, and concentration, it’s difficult for stakeholders to act effectively and intelligently.  There is no shortage of challenges to document, but what are the solutions?

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