Federal Reserve Governor Sarah Bloom Raskin said the loss of equity in homes during the recession was especially damaging to low-income and minority neighborhoods.
“I don’t need to tell you how damaging the recession was to low and moderate-income neighborhoods,” Raskin said today in a speech in Washington. “By mid-2000s the impact of subprime mortgages, particularly those targeted to low-income and minority neighborhoods, was easy to see.”
“Home equity has traditionally been an important source of savings,” she said, calling it a “cushion” against unexpected expenses. During the downturn, however, homeownership was more of a cost than an asset for many people, Raskin, a former state bank regulator, said during brief introductory remarks at the NeighborWorks 35th Anniversary Symposium.
Jeanna Smialek in Washington at email@example.com