The Center for Public Integrity

Four years after the housing market collapse triggered a wave of defaults, the worst may be yet to come for homeowners, according to a new study.

Among mortgages made between 2004 and 2008, 2.7 million households ended up in foreclosure while 3.6 million more are at “immediate, serious risk” of default, according to the study, released by the Center for Responsible Lending Thursday.

Minorities are particularly at risk, according to the study. Although the majority of borrowers who have lost their homes or who are seriously delinquent are white, foreclosure rates for minority borrowers are twice as high.

Approximately one quarter of all black and Hispanic borrowers are in trouble compared with about 12 percent of white borrowers.

These disparities cannot be explained away by income. Ten percent of higher-income African-American borrowers and 15 percent of higher-income Hispanic borrowers have lost their homes to foreclosure, compared with 4.6 percent of higher-income white borrowers.

Minority borrowers were also much more likely to receive high-cost, subprime loans than other borrowers, even those with similarly good credit histories. For example, among borrowers with a credit score of more than 660, black and Hispanic borrowers received a high-interest-rate loan more than three times as often as white borrowers.

The study – “Lost Ground, 2011: Disparities in Mortgage Lending and Foreclosures” – concludes with a plea for stronger government measures to prevent foreclosures and to reform the lending market in ways that don’t close doors for low-income and minority borrowers.

To prevent a future crisis, “we must not create an environment where qualified borrowers are denied access to reasonably priced mortgages,” the study reads.

The foreclosure crisis met the campaign trail this week in Nevada, with President Barack Obama and Republican candidates for president suggesting sharply different approaches to help address the nation’s continuing housing crisis.

As many as a dozen "Occupy Wall Street" protestors and their allies were arrested Thursday afternoon as they tried to stop a foreclosure auction inside a courthouse in Brooklyn, N.Y.

As the auctioneer called the proceeding to order, the protestors, who had been sitting quietly in the courtroom, broke into song. “Mrs. Auctioneer, all the people here are asking you to hold all the sales right now,” they sang, in surprising harmony. “We’re hoping to survive, but we don’t know how.”

Their voices filled the courtroom and, for a while at least, brought the proceedings to a halt. After a few minutes, a court security officer warned them to stop or face arrest, but he could barely be heard over the singing. The singing continued for about a half an hour until they were led off in plastic handcuffs, still singing.

The disruption coincided with a larger protest outside the state Supreme Court building in downtown Brooklyn, across the East River from Wall Street.

“We all know there are hundreds of thousands of people who have lost their homes through nothing but outright theft,” housing activist Frank Morales told a crowd of more than 100 outside the courthouse.

The courtroom action was planned in secret by protestors linked to Occupy Wall Street and another group, "Organizing for Occupation," which had previously formed an “eviction blockade” at the home of an 82-year-old grandmother in Brooklyn. So far, the group has been able to prevent the woman's eviction, but the outcome of Thursday’s sing-in in the courtroom was less certain.

After the protestors were arrested, the courtroom was opened back up for the foreclosure auction. For sale on the courtroom docket was at least one residential home as well as two commercial properties. It is not known who owned the home, or what led to the foreclosure.

After she lost her job in the fall of 2007, Cassandra Daniels had a word with a trio of her managers. As she recalls it, she told them she was praying that, someday, they’d learn to use their positions of power “to uplift your staff instead of destroying people.”

She cleaned out her desk and taped a handwritten sign to her computer screen, quoting one of her favorite gospel songs: “GIANTS DO FALL.”

That marked the end of Daniels’ tumultuous relationship with Countrywide Financial Corp., the nation’s largest home lender during the mortgage boom.

For Daniels, her four years as a loan underwriter inside Countrywide’s mortgage-production machine were a blur of 12- and 14-hour workdays and frequent clashes with managers and salespeople regarding loans she believed were tainted by fraud.

When she rejected loans that were based on inflated income statements or other questionable information, she says, management overruled her and pushed the deals through.

“The sad part is I lost hope in the integrity of any system,” Daniels recalled in an interview with iWatch News. “Because there were supposed to be checks and balances. But there weren’t. All these people were driven by pure greed. And they didn’t care that it was at the expense of other human beings.”

Bank of America Corp., which bought Countrywide in 2008, declined to comment on Daniels’ account of her time at the lender. However, a spokesman has dismissed the idea that Countrywide management encouraged fraud inside the company. When fraud happens, the spokesman said, “the lender is almost always a victim, even if the fraud is perpetrated by individual employees.”

‘Fast and sleazy’

Before she began working at a Countrywide branch in Chicago’s western suburbs in the summer of 2003, Daniels, a single mom, was working two jobs, as a manager at a local bank in Naperville, Ill., and as a night auditor at a Marriott hotel.