2008: The Great Recession

More Devastation

Ballooning foreclosure rates, loss of value for “mortgage-backed securities (MBS) and derivatives,” and the decline of “solvency of over-leveraged banks and financial institutions” (AIG, Lehman Brothers, etc.) caused the Great Recession (Picardo, 2018). The Great Recession further devastated African American communities in Baltimore. Pietila (2010) found that “More than 33,000 homes were foreclosed on between 2000 and 2008, when Baltimore became the first city to sue a lender under the 1968 Fair Housing Act” (p. 258). Coates argued that

In 2011, Bank of America agreed to pay $355 million to settle charges of discrimination against its Countrywide unit. The following year, Wells Fargo settled its discrimination suit for more than $175 million. But the damage had been done. In 2009, half of the properties in Baltimore whose owners had been granted loans by Wells Fargo between 2005 and 2008 were vacant; 71 percent of those properties were in predominantly black neighborhoods.

Despite laws and regulations enacted to protect people of color from speculators, flippers, and unethical lenders, the real estate transactions in the 2000s continued the long history of systemic racism in America and in Baltimore.

Source: Governing.com

African Americans lacked historic wealth as a result of slavery and racist housing practices, continued to be forced into housing areas with much less value, and were often defrauded out of housing situations that would normally provide wealth advancement for white Americans. The system existed to benefit whites and was structured to control Black advancement and limit their attainment of wealth. As Bonilla-Silva (2018) noted

The available data on wealth indicate that the disparities in this important area [of wealth accumulation] are greater than in any other economic area, and they are increasing. Blacks owned only 3 percent of U.S. assets in 2001, even though they constituted thirteen percent of the U.S. population. In 2013, the median net worth of whites, $141,900, was about thirteen times that of blacks, which was only $11,000. This represents the largest gap in black-white wealth since the late 1980s. (p. 48)

The shameless exploitation of the African American community by the banking community and ongoing discrimination in housing further segregated Black America from white America.