Minorities hit hardest by housing crisis

By Dana Ford

LOS ANGELES (Reuters) - 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?