After the largest growth in homeownership in history during the last 15 years, blacks and Latinos are now suffering their largest loss in wealth in modern history. And that erosion of wealth could lead to a second collapse in the national economy within a year. This was the core message of a white paper released this month by the William C. Velasquez Institute. The report describes how this lost wealth — more than 0 billion during the last three years — could impede the economic recovery of the entire country if it is not addressed. “What we found was, quite frankly, much more dramatic than any of us thought it would be,” said Albert Jacquez, of Strategic Solutions Washington, and a co-author of the study. Latinos and African Americans were 230 percent and 270 percent respectively more likely to get subprime loans. Nine million home foreclosures are predicted in the next two years and are expected to fall disproportionately on new black and Latino homebuyers, particularly in states like California, Texas, Florida and Arizona. But here's where others come in. Baby boomers will soon be net home sellers, not homebuyers, said Jacquez. The demographics show the new homeowners will be Latinos, blacks and Asians. But without reforms, they may not be in a financial position to take advantage of this opportunity. “The secret is that we are by no means out of the foreclosure crisis,” said Raul Hinojosa Ojeda, an instructor at UCLA and another co-author of the paper. “All of the policies at the state and federal level are a fraction of what’s needed.” The Obama administration has not done enough to address this crisis, Hinojosa Ojeda said. The administration’s relief only affects 100,000 families, which he called "a drop in the bucket." "The problem is that if you have a regulatory reform when your foundation is still crumbling, it is really not going to make a difference," he said.

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