In May, Alvin Clavon received a foreclosure notice on the simple, Spanish-style house in South Los Angeles that he shares with his wife and three boys.
Clavon bought the place in 2003 with a fixed-rate loan. They painted the walls, fixed the yard and made friends with the neighbors, who let the Clavon boys pick their basil.
In 2005, he worked with a mortgage broker to refinance his home with another fixed-rate loan. But on the night before signing, the family was offered an interest-only, adjustable-rate mortgage.
Clavon, a 35-year-old executive assistant at a bank, said he felt stuck. The ball was rolling, he trusted his broker and so the next day, he signed the loan.
Turned out to be the worst thing I could have done, said Clavon, who like so many others in danger of losing their home to the U.S. housing crisis, is African American.
The Clavons live in a zip code, 90047, with one of the largest black populations in the city, and also one of the highest rates of foreclosure -- a common combination.
Researchers agree minorities are more likely than whites to get high-cost mortgages, but analysts can't agree why.
Does the 90047 zip code have a high foreclosure rate because African Americans were forced into high-cost loans? Or is the area's foreclosure rate the result of economics?
Either way, say some minority and housing activists, the fact that minorities are disproportionately hurt by lending practices in the United States is real -- and so are its consequences.
RACE OR RISK?
Study after study show that minorities are more likely than whites to get subprime mortgages, which are high-cost loans made to people with poor credit. In its heyday earlier this decade, the subprime market was cheered as an avenue through which historically shut-out borrowers could get loans. That frequently meant minorities.
So long as home prices rose, the subprime market seemed a positive example of how to increase home ownership, but as the housing market weakened this year, many began to question whether the loans were fairly priced.
In September, the Federal Reserve released a study that found 52.8 percent of African-Americans got a high-cost home loan when they refinanced in 2006, compared to 37.7 percent of Latinos and just 25.7 percent of whites in the same year.
A similar study by the Association of Community Organizations for Reform Now, known by its acronym ACORN, in September found the same pattern even when income was equal.
According to ACORN, upper-income blacks were 3.3 times, and Latinos 3 times, more likely than upper-income whites to have a high-cost loan when purchasing a home in 2006.
I keep hoping one day I'll do a study where race doesn't play a part, said Liz Wolff, author of the ACORN study.
But clearly, there is a racial bias, she added.
Jay Brinkmann, vice president of research and economics at the Mortgage Bankers Association, disagrees.
He believes that if researchers could account for all the factors that go into pricing a mortgage, they would find race doesn't matter.
The pricing is based on risk, not race, said Brinkmann.
THE AMERICAN DREAM
The answer may be decided in court.
In July, the National Association for the Advancement of Colored People, or NAACP, filed a discrimination suit against 11 of the country's largest lenders, saying minorities are steered toward high-cost loans more often than whites, even after all risk factors are considered.
The ACORN study found that high foreclosure rates cause higher rates of crime, lower tax revenue and property values. In other words, whole minority communities, not just individuals, are hurt when houses go under, said Hilary Shelton, director of the Washington D.C. Bureau of the NAACP.
The individual stories are heart-wrenching, said Shelton. Part of the American dream, is being able to have a safe secure home where you can raise your family.
But if we go beyond that and see how it affects entire groups ... we know there is a racial factor, said Shelton.
Despite the foreclosure notice on his house, Clavon still owns it. He'd like to sell, but can't find a buyer.
The facts are there. So-called minorities are disproportionately represented in these loans, Clavon said about subprime lending.
You can make out of that what you will.
(Editing by Peter Henderson, Mary Milliken and Eddie Evans)