The current American foreclosure crisis is affecting people right across the social spectrum. This includes the wealthy, the middle class, and the emerging successful too – stories affecting previously disadvantaged people are especially distressing.
Take the case of African-American Tyrone Banks, for example. The single father had been seeing his economic hopes dawning as he worked for Mississippi Fedex, moonlighted elsewhere, built a fine brick Memphis house, put his eldest through the local college and worked on his retirement plans.
The recession that is still rolling through has hit our friend badly as mortgage interests shot upwards and his career nosedived. These days a fit intelligent man in his fifties is facing both foreclosure and bankruptcy as he cleans toilets and mops up spills for a survival living. He’s still proud of what his past accomplished, but equally sad to see his personal tides of fortune ebbing out.
Memphis – where the foreclosure rate is twice the national average – used to be the symbol of an America beyond racial history where her black sons and daughters could also join the middle class. These days the city paints a blacker picture of a different hue – America’s current woes have pushed black wealth back two decades, all but erasing progress made.
Until five maybe six years ago the median incomes of African-Americans in Memphis had been rising steadily, but now it’s back down to 1990 levels – and just on half of what white people earn. Their neighborhoods are in tatters with foreclosed houses standing empty in Cordova, Orange Mound and Whitehaven and prices following accordingly.
Memphis black unemployment is also worsening. It currently stands at almost 17% compared to 9% two years ago, more than three times worse than the local white unemployment rate of 5.3%. The worst long term effect of this will be the impact of current milking of savings, retirement reserves and other assets in an attempt to stay above water – is America building another generation of poverty stricken black older folks while the nation sleeps?
Expect the repercussions to be long lasting, says the Institute on Assets and Social Policy at Brandeis University. The historic gap in wealth between black and white Americans is a long unhealed and festering sore. According to the Federal Reserve, for every dollar a white American family holds, their black neighbor possesses just 16 cents.
“This cancer is metastasizing into an economic crisis for the city,” said Mayor A. C. Wharton Junior. “It’s done more to set us back than anything since the beginning of the civil rights movement.”
The Memphis mayor and his officials point their fingers at banks like Wells Fargo. Do you agree?
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