Today, President Obama announced a new plan to help five states fight through the ongoing impacts of the foreclosure crisis. I’m going to hold off on judging this new initiative, but the help has never been more urgent. Obama’s announcement comes on the heels of an important new study from our friends at the California Reinvestment Coalition, "Foreclosure to Re-Redlining: How America’s largest financial institutions devastated California communities," details some troubling findings about the hurdles Californians are facing as folks try to dig themselves out of the recession. California has turned out to be an especially compelling place to study the mortgage crisis and recovery because of the state’s special distinction as being the #1 foreclosure state in the U.S. in 2009. That’s 632,573 foreclosure notices that were sent last year. And, surprise surprise, it was communities of color that were disproportionately affected by these foreclosures. I got particularly stuck on this finding:

At the city level, high-cost loans by Big Bank Lenders (Bank of America, Citibank, Indymac/OneWest, JP Morgan Chase, US Bank, and Wells Fargo, and their affiliates) were concentrated in neighborhoods of color, as well. In Oakland, the Big Bank Lenders made 70% of all of their high-cost loans in neighborhoods predominantly of color. At the same time, the Big Bank Lenders made just over 40% of their lower-cost prime loans in these same neighborhoods.

But not only were communities of color targeted with high cost subprime loans, a fact that cannot be repeated enough, this set up the conditions that allowed for a high concentration of foreclosures in communities of color. And when it came time for the recovery that was supposed to take place, communities of color got shut out again because banks refused to cooperate to modify loans or restructure mortgages to help families stay in their homes. (ColorLines has also reported in the past on subprime mortgages and their targeted effect on women of color.) And it seems that every opportunity thereafter the banks and financial institutions have had to lift everyday Americans out of the recession has been squandered. From the report:

Several industry and government initiatives, including the Obama Administration’s Home Affordable Modification Program (HAMP) and the Troubled Asset Relief Program (TARP), have done little to induce banks to halt foreclosures or make new loans. And these policy initiatives have failed to impose any meaningful consequences on banks for their failure to do as they have committed to President Obama.

CRC recommends several policy changes that include strengthening the Community Reinvestment Act and the Consumer Protection Financial Agency. Download the report by clicking here. It’s important studies like this that hardens my anger at the corporate entities and policies that enabled and encouraged this mess to unfold across the country. And, I must say that this report is one of the most digestible works of research literature I’ve come across in a long time. It’s definitely a great read if you’re looking to get educated on the economic mess communities of color are mired in right now and what it will take to get us out.