Stockton

Grim outlook for Latinos

One of the markers of having reached the American dream is home ownership.

But for millions of Latinos the high point of buying a home has twisted into a nightmare, because as the economy dipped over the recent years, Latinos have become one of the hardest hit groups, mostly in connection to the fall of the housing market.

A new report by the Pew Research Center, 'Twenty to One: Wealth Gaps Rise to Record Highs between Whites, Blacks and Hispanics,' reflects other reports that show wealth among Latinos has fallen lower than any other racial or ethnic group.

Nationwide, the median household income for Latinos dropped to $6,325 in 2009 compared to $18,359 in 2005, according to the center. That is a 66 percent decline.

The second most significant down shift is attributed to black households, which saw a 53 percent decrease in wealth. The impact on white households was 16 percent.

Pew Research Center's report found the main cause for the plunge in capital is the diminishment of home values.

Carol Ornelas, director of Stockton-based Visionary Home Builders, a nonprofit developer of affordable housing, said she isn't surprised.

"It's a horrendous impact on both the Hispanic and black communities," said Ornelas, whose organization has programs on homeownership education and payment assistant in San Joaquín County.

The effect on Latino families has been more severe, however. That's because their home equity made up nearly 67 percent of their net worth in 2005, according to the report.

And the situation becomes more blatant in states, such as California, where Latinos make up the largest minority group.

In California, 50 percent of home loan defaults were of Latino households, Ornelas said.

"One in six Latino families are at eminent risk of losing their home or have already lost their home," Ornelas said. "I think people need to educate themselves, so they can talk about the issue and understand what is going on in the future."

Pew's findings, the first view of the Great Recession's blow to household wealth, shows Latinos' assets were 18 times less than what white families reported, and black households were 20 times less. These are the most robust differences -- about twice the size -- among the groups since this type of data was first published about 25 years ago.

Ornelas hopes that Latinos will use the recent recessionary effects as lessons for future planning, rather than giving up their dream to be homeowners again. Visionary Home Builders, she said, is helping San Joaquín County residents bounce back with a program that focuses on five areas: social services to cover basic needs in their financial struggle; housing assistance to provide shelter to those who've lost their homes; financial education, so they can plan for the future and make calculated decisions; employment assistance for clients to become or remain self-sufficient; and an education component that promotes child education development and higher learning.

Additionally, Visionary Home Builders is embarking on a new venture in which it buys homes to take them out of the market, and sells them to former homeowners recovering from a financial crisis. It's already helped 17 families buy homes in San Joaquín County through this program.

The group also advocates for affordable and equitable housing, including speaking out against the proposed Qualified Residential Mortgage rule, which would require buyers to put 20 percent down payment to qualify for the best interest rate.

"This proposal is going to set our families back many years. It's keeping us where we are, and keeping us from advancing," Ornelas said. "No one should be left out. Anytime we can save a dollar and increase its value, it gives us power. And with power, many times, it opens up opportunities."

Ornelas encourages home owners to educate themselves, speak out against policies that harm their financial well-being and continue working toward bouncing back.

"It's like falling off that bike. You gotta get back on it. And that's what we have to do as a Hispanic community," she said.

Send e-mail to: jrodriguez@recordnet.com

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