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Minorities, Elderly Are Among Those Having Most Trouble Paying Mortgages

[Jan 18, 2009.]

 

People in California, Nevada, Florida, are among those having the most difficulty with paying their mortgages, according to the Associated Press (AP). Furthermore, of Hispanics in New Jersey, single parents in California, and senior citizens in Rhode Island, more than a third can't afford their mortgages.


The AP analyzed U.S. Census data and found that the financial burdens Americans are facing because of the economic crisis are distributed unevenly geographically and demographically. Minorities are especially hard hit.


According to the AP, "Just under a third of Hispanic homeowners spend at least 38 percent of their income on housing expenses, compared with about a quarter of Asian and black households and nearly 16 percent of white households."


To qualify for a loan assistance program available through Fannie Mae and Freddie Mac, borrowers must spend at least 38 percent of their income on housing.


Many Hispanic families are victims of subprime lending. Many of these borrowers had steady incomes, but didn't have established credit histories so they received higher interest rates on loans that didn't require income verification.


Also, about a third of homeowners who didn't graduate from high school or college spend at least 38 percent of their income on housing, compared with 12 percent of borrowers with advanced degrees.


While some of these borrowers knew they were buying more house than they could afford, there are cases where lenders took advantage of people, particularly immigrants and the elderly.


Many Americans are hopeful that the new administration can enact measures that will help fix the housing market's woes. President-elect Obama plans to use up to $100 billion in bailout funds to help prevent more foreclosures. However, whatever steps are taken, it will take some time before the housing market really begins to improve.

 

About Author:

Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.

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