Race, Ethnicity and Negative Equity in Lucas County, Ohio

NEGATIVE EQUITY & FHFA FAIR HOUSING DISCRIMINATION

When it comes to living in neighborhoods that are deeply underwater, not everyone is created equal. In fact---as is true in most
other areas of the United States---to be Black or Hispanic in Lucas County, Ohio, means that you are two to three times more likely
to suffer from severe negative equity on your home than if you are non-Hispanic and white. The table below captures the stark
reality of this disparate impact by cataloguing the demographics of Toledos most severely underwater zip codes. All of the
neighborhoods listed below are in the top 5% of postal codes nationally for their high percentage of underwater mortgages.
The map, table and graph demonstrate what drives negative equity is
not borrower (mis)conduct. Negative equity is driven by race and
ethnicity, and the skewed economics of disparate impact, aggravated
by institutional (FHFA-controlled) mortgage servicing discrimination.
If I am an African American homeowner in Toledo, Ohio, I am twice as
likely to be living in a severely underwater neighborhood as are all Lucas
County residents combined. If I am Hispanic, I am two times more likely
to be living in a deeply underwater neighborhood than if I was a non-
Hispanic, white homeowner. And a Black family living in Lucas County is
almost
three times
as likely to
suffer the
onerous,
life-limiting constraints of debt servitude (or what we refer to in
polite company as being underwater) as a white, non-Hispanic
family.
These disequities devolve from race, not conduct. Dubious moral
hazard constructs notwithstanding, negative equity doesnt respect
the behavior, ethics or financial savvy of a homeowner. Negative
equity drowns everyone in the vicinity of a minority neighborhood
because of mere segregated, adjacency. So while the blanket FHFA
policy of refusing to allow mortgage principal correction appears
racially neutral, the reality is that FHFAs policy doesnt harm
white, non-Hispanic homeowners nearly so often, nor for as much, as it harms Black and Hispanic homeowners and their
neighborhoods.