Dec 15, 2007 4:12 pm US/Central
Foreclosures Getting Worse In Minority Communities
CHICAGO (CBS) ―
Just two days after the Senate approved a bill to protect families facing foreclosure, Illinois Attorney General Lisa Madigan has opened an investigation into the lending practices of the biggest mortgage lender, as CBS 2's Rafael Romo reports.
Ruby Daniels says she's three months behind in her mortgage payment.
Two years after purchasing her home, her mortgage rate readjusted and her payments went up by 62 percent.
"We went from $569 to $924, so it's pretty rough for us," Daniels said.
Thousands of Chicagoans who purchased their home with a subprime loan are now in the same situation.
"This is a crisis that is going to have catastrophic impact, not only into our communities, but into this country and the global economy," said Sen. Jacqueline Collins (16th).
"Chicago is in fact the epicenter of this epic disaster," said Illinois State 's Attorney Lisa Madigan.
Madigan has opened an investigation into the lending practices of Countrywide, the largest mortgage lender. She says Countrywide and other mortgage companies have been targeting African-American homeowners.
"If you are African-American with an income higher than a $100,000 you are five times more likely to have a subprime loan than if you are white, Asian or Latino," Madigan said.
Last year, there were more than 72,000 foreclosures in Illinois -- just in the Chicago area, the number of foreclosures is up 42 percent over last year.
"It's a combination of greed, as well as patterns of race discrimination," Rev. Jesse Jackson said." "Fifty-three percent of all loans that went to Blacks were subprime."
Recent findings show almost three quarters of all foreclosures in the city of Chicago are in minority communities, an increase of 12 percent over the last decade. In 2008, the situation may only get worse as thousands of subprime loans are scheduled to reset.
Countrywide Mortgage declined to comment on the investigation into their lending practices. In a statement, the company would only say they are cooperating with the state's investigation.
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