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Continued: Housing recovery in Minnesota leaves minorities behind

  • Article by: ALEJANDRA MATOS , Star Tribune
  • Last update: May 9, 2013 - 1:41 PM

“Our loan decisions are based on credit and transaction risk. Race is not a factor. We are committed to serving all customers responsibly and fairly, and we know that our continued growth depends on that,” she said.

Recession plays bigger role

Luke Grundman, an attorney for Mid-Minnesota Legal Aid, said the first wave of foreclosures among minority homeowners was the result of so many subprime loans.

“Now we are in the midst of the second stage: poor mitigation efforts and ethnically-targeted foreclosure scams,” Grundman said.

Sanchez, Grundman’s former client, said he was desperate to keep his home, which is why he turned to someone who promised help. But paying $1,800 upfront did not sit well with Sanchez.

“I didn’t understand why he would need that money,” Sanchez said. “I later went to an agent I trusted and she said, ‘What have you gotten yourself into?’ That’s when I found out someone who was really going to help me with a loan modification or a short sale would not be asking me for any money. ”

With Grundman’s help, Sanchez got his $1,800 back, but still lost his house.

Sanchez said he often thinks the Latino community in Minneapolis is taken advantage by people of their own background.

“I’m from Mexico. This man was from Mexico,” he said. “These people often see the vulnerability in the community and they take advantage of that.”

When Bernicia Flores and her husband Carmelo purchased their home on 4th Avenue S. in Minneapolis in 2005, they were paying $1,900 a month for their mortgage. Then they found out that they had to pay thousands of dollars to replace the roof and windows, costs that they hadn’t expected.

She tried to refinance but was denied several times. When the foreclosure notice arrived, she paid more than $500 to two people who promised to help her keep the house. Neither came through.

The bank foreclosed on her home in December.

“It was devastating for my daughters,” Flores said in Spanish. “They cried so much. It was worth so much to us, but the more money we put it into it, the more we lost.”

Other disparities play key role

Unemployment or loss of income can lead families to fall behind on mortgage payments and then fall for other scams that promise to get them back on their feet.

In 2012, the Economic Policy Institute reported that the black unemployment rate in the Minneapolis metro was 3.3 times that for whites, the biggest black-white unemployment disparity in the nation.

Jewel Tracy, who’s black, lost her job with Kelly Services in February 2010 and began falling behind on the payments on her home on Clinton Avenue S. in Minneapolis.

“I was going to start receiving Social Security in nine months,” said 65-year-old Tracy. “But in between that time, I just couldn’t find work.”

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