Ginny…At the top of the market, I owned three properties: my first home (in a marginal neighborhood, now about 100 percent upside down), my own residence (a big fixer in a great neighborhood), and a triplex I bought as an investment (an OK neighborhood, needed some work, fully rented, but now upside-down by about 30 percent).

When the market turned, I had a couple of bad tenants in my first home and the triplex that set me way back financially, and I was unable to borrow the money I needed to fix the house I lived in. I did a short sale on the fixer, got temporary loan mods on the other two, and moved back into my first home.

Problem is, they’re both so upside-down and don’t seem likely to come back up anything soon. I’m 45 years old and have a great job, but I don’t like the neighborhood I live in now and I can barely ever save anything because these properties — which I thought would help fund my retirement — eat me alive.

Also, I just got word that my loan mod on the triplex is going to expire in January. Should I just sell everything and start over?  Chloe C., Pacific Palisades

Chloe…First, know this: You are not alone. More than 25 percent of home mortgages nationwide are upside-down.

While the majority of Americans have held onto homes with declining and stagnant values in the hopes that the market will recover to avoid locking in their losses, the data is clear on the fact that those who own homes worth less than they owe are the borrowers most likely to fold, short-selling, strategically defaulting or negotiating a “deed in lieu of foreclosure” with the bank.

I don’t think data exists on this point, but I suspect these are the borrowers most prone to give up on the excruciating and prolonged path of home retention efforts the most easily. “Why throw good money, time, energy and emotions after bad?” they wonder.

A few years ago, I would probably have fallen into the cheerleader camp, exhorting “Hang on! Hang in there!” Now, though, going into the fifth or sixth year of this real estate recession, depending on whom you talk to, I’m more jaded and realistic.

As I see it, you have two different scenarios that make up your dilemma, and there are a couple of different ways to think about them. First, let’s limit the scope of our conversation to the situation on the home you actually live in. Next week, we’ll look at the broader constellation of issues you have, including both your residence and the investment property.

My advice to people in your situation is to always go through the preliminary step of getting clear on whether their personal residence still works for their lives as a personal residence.

If you own a home that works well for your life, is affordable and seems like it will continue to be a good fit for your life and your finances in the foreseeable future, I’m generally inclined to advise homeowners to avoid making market-based decisions about whether to continue to hold on to it, whether or not it happens to be upside down.

On the flip side, I’ve seen numerous situations in which families have expanded or shrunk or need to relocate, rendering the upside-down home a serious mismatch. In these cases, it makes sense to more seriously consider whether to divest.

I’d encourage you to ask yourself that question — “Does this home ‘fit’?” — regarding your personal residence. You mention the neighborhood weighs against that finding of fit; you might also be thinking that the neighborhood could prolong the “value recovery” timeline.

Take a more holistic viewpoint and make a decision about whether the home overall still works for your life or not — outside of the context of it being underwater. Whether it does or does not, this knowledge will get you started down the path of cultivating the clarity you’ll need to put a full action plan and decision-making process in place.

The preliminary step I want you to take with respect to your personal residence, of examining whether the home still works for you, for the most part, as a personal residence, notwithstanding the fact that it’s upside-down.

Many a homeowner makes the wise decision of staying put in an underwater home on the grounds that the home is functioning well as a home for their family, is affordable and looks like it will remain functional on those counts for the foreseeable future.

I’m aware, though, that your situation is complicated by your perception of both of the properties at issue, at least in part, as investments that now seem likely to have outlived the purpose for which you bought them.

I can’t give you a black or white answer in terms of whether you should sell or hold either or both of your properties. But I can give you a set of considerations to factor into your decision. After you evaluate the life-property fit of the home you currently live in, consider these three things:

1. Your options. One of the biggest, most stressful mistakes we make, as humans, is to agonize over decisions without a complete understanding of the full spectrum of options that are available to us. So, educate yourself!

Get online and do your reading, talk with your own lenders to see what options they might have available, and then also talk with local professionals you trust — at the very least, include a real estate broker, a mortgage pro, an attorney and a tax expert on this list. They might know of options you don’t, and they might be able to help you understand the timelines and feasibility associated with each option.

For example, banks seem to be granting short sales at higher rates than before, but they still take a long time, and the exemption from federal income taxation on the debt forgiven via a short sale is currently set to expire at the end of 2012. That might suggest you should list your properties for sale and apply for short-sale approval, stat.

On the other hand, there have been a number of governmental foreclosure relief program developments that might offer help for you, some of which are available only in the hardest-hit states.

The pros can also help you get a deep understanding for all of the tax, credit, financial and even legal implications of all the options available to you. Get the information and professional input you need to fuel a clear, complete understanding of your options before you move forward with your decision-making process.

2. Your values. The decision whether to hold or sell your properties is a hybrid business/personal decision that will impact the overall “after” picture of your life. While you can and should factor in input from professionals and even personal advisers whom you trust are knowledgeable and have your best interests at heart, only you can decide what’s really important to you in a way that drives the ultimate decisions you make.

(And decision really should be decisions, plural, because you could very well create an action plan that involves putting the place on the market as a short-sale listing while you apply for a loan modification, or some other set or sequence of actions.)

So, when I say to factor in your values, I’m simply encouraging you to get clear on what is important to you. Owning the place you live? Tax advantages? Reducing your expenses? Saving up to secure your retirement?

This phase of the process will help you get out of the very common real estate decision trap of doing things for their own sake: owning because ownership is good, or getting out of the market because that’s the supposedly smart thing to do.

Whether you decide to hold, sell, or try to make some other changes to your situation then sell as a backup plan, it’s important that each action step you build into your plan be set in service of some higher life aim, goal or value.

3. Your priorities. Once you do a deep dive into your values and even list them out in writing, one essential truth will quickly become very evident: You can’t (likely) have them all. Early on in this decision process, you’ll need to rank your values and objectives in order of importance, and communicate that to the professionals you look to for advice.

There are trade-offs involved in virtually every real estate decision. For example, you might have to give up some tax benefits of property ownership to cut your costs and save your financial acorns for the winter of retirement.

You might have to sacrifice free time and get a side job to make your real estate obligations if you decide to keep the triplex after the mortgage adjusts (if you’re currently paying only interest, a mortgage adjustment that happens in January might involve a decrease in interest rate but still increase the overall payment if you have to begin paying toward principal).

Only you can know what’s important to you, in your finances and your life, to make the critical decisions you now face. So get clear on your full range of options and the implications thereof, build out a strong sense of your own values and life vision, then prioritize and rank the things that are important to you. Once you have these inputs, your action plan should soon become clear.

Jerry Yudelson is about as green as they come. In his more than 25 years of work in sustainability, he has been a member of the U.S. Green Building Council’s board of directors, a Leadership in Energy and Environmental Design (LEED) national faculty member, and is the co-founder and director of the Green Building Service consulting unit at Portland General Electric. Last year, Wired magazine dubbed him “the godfather of green.”

So what does the industry insider have to say about where things are going? “The construction industry is going to have modest growth this year,” Yudelson said Tuesday in a webinar on GreenExpo365. “It seems that most people have figured out that the sky isn’t going to fall in and they are going to get back to doing business … but with an emphasis on what I call ‘frugal green.’

“In the past there was a feeling that you could spend money to add green features. I think today the real challenge for construction and design professionals is ‘How do I do this on the same budget?’ and I think that’s the core trend.”

Yudelson unveiled a list of 10 other green megatrends destined for growth in 2012, both in the U.S. and abroad. And while, like the rest of the homebuilding industry, green building will certainly face headwinds in coming days — such as squeezed budgets among families and governments — the market is poised for growth, he says. “You make money if you go green. If you don’t go green, you’re at a marketplace disadvantage.”

U.S. Ten Green Megatrends for 2012

1. Green building growth to rebound

LEED project growth was slow in 2011, only gaining 3 percent for the year. But while LEED certification on new projects may take longer to gain much steam, the program’s retrofitting arm, LEED for Existing Buildings: Operations and Maintenance (LEED-EBOM), is quickly gaining traction.

EBOM project registrations were up 18 percent last year, and the EBOM project area exceeded the cumulative LEED-NC (New Construction) area for the first time, with 675 million square feet of EBOM vs. 649 million square feet of NC.

“That trend will continue this year,” Yudelson says, as more property owners realize that retrofitting to LEED standards is fairly painless when starting with a building that is already Energy Star-rated.

2. Federal momentum has slowed

The Department of Defense recently stipulated that projects can’t spend any extra money on energy program certification, and while “that’s not necessarily a killer,” Yudelson says, “it is an indication that there is some backlash for spending extra money on anything.”

Getting federal funding for green projects will be harder going forward, he says, especially given the recent Solandra scandal and the federal budget crunch. But while state and local governments aren’t faring much better, that’s where the action will be, he says, as existing buildings will need to be upgraded, projects in the pipeline will move forward, and schools — which are funded by bonds — will need to be built.

3. LEED-EBOM will gain momentum

“We’re going to see this move to other sectors,” he says, particularly among hotels with strong convention and meeting businesses who want to be able to market their eco-friendliness. Grocery stores, hospitals and retail centers are moving in the same direction, with features such as solar panels on top of Wal-Marts or department stores.

“Last month, President Obama and former President Clinton announced the Better Buildings Initiative. It’s only $4 billion, so it’s not huge. But still, this is stuff that moves markets. When you have two presidents pushing something, it does get people’s attention. More and more building owners are realizing that they don’t want to be late to the party.”

4. Water issues grow in importance

“Even the water-wet areas have water problems brought on by infrastructure problems and population growth,” Yudelson says. “Florida doesn’t have a place for a reservoir in the entire state, so even if you have a slight drought, you have big problems.”

He predicts rainwater capture systems, as well as gray water and black water on-site treatment capabilities, will become more pervasive. “Instead of toilet to tap, we’re going toilet to toilet.”

5. Zero-net-energy to gain traction

“Zero-net-energy needs to be in your future,” Yudelson says, adding that it works best on two- to four-story buildings that use only between 30,000 and 35,000 British thermal units per square foot per year.

“If you do a good job with integrated design, you can reach that (thermal units) goal,” he says, adding that getting to net-zero should add only between 3 percent and 5 percent to building costs.
Global Trends

6. Green building movement will continue to grow

There are now more than 90 national Green Building Councils throughout the world, and LEED projects have been registered in 161 countries, Yudelson says. Last year, 44 percent of total LEED registrations were outside the U.S.

“This is a movement that you have to pay attention to,” he says, adding that the “Big Three” energy rating systems — LEED, BREEAM and Green Star — are already converging toward common carbon metrics and common rating concerns.

7. Performance disclosure

Already popular in the European Union and Australia, requirements for buildings to disclose their energy use are gaining traction in the U.S. Beginning April 1, Seattle will require buildings of more than 10,000 square feet to disclose energy usage, and California will begin requiring disclosures starting next year, which Yudelson says will have a market impact, as prospective tenants will be able to compare what their energy costs will be between buildings.

“This is going to happen everywhere, particularly in big cities, because it’s the easiest move to take politically. It doesn’t say you have to retrofit the building. It just says you have to disclose,” he says.

8. Global carbon ratings

Carbon ratings that remain standard across countries are of particular interest to global property management companies. “If your company is committed to sustainability, you’re going to have to report this,” he says.

It’s also an issue for property investments tied to pension funds. “Anyone that has sustainable interests and wants access to capital will have to deal with this,” he says.

9. Solar power stalls

“Solar power is kind of slowing down,” mostly due to the costs involved, Yudelson says, adding that the focus is shifting instead to energy efficiency. “Solar is still happening. Lots of people like solar … because it’s visible and people want to see something for their money.”

However, for those building new construction today, he suggests that the most responsible move would be to make it “PV ready,” so that as solar becomes more cost-effective it will be cheap and easy to install.

10. Building management goes into the cloud

As buildings get more complex, Yudelson says, “we’re seeing the need for software that allows us to manage buildings out of the cloud.” Thanks to wireless sensors and controls, it’s getting increasingly easier to better direct building managers and maintenance people to locate and fix problems, and to do so remotely.

Most residents give little thought to how they communicate with their property manager or landlord. Considering that nearly 35 percent of Americans currently reside in approximately 40 million rental units throughout the country, it is surprising that so few of us really understand how to communicate effectively with our landlords.

Almost every one of these landlord-tenant relationships last a minimum of one year and some last many years, even decades.

The relationship that you enjoy with your landlord can directly impact your lifestyle, comfort, image and financial standing. Establishing a positive and healthy relationship with your landlord can go a long way in helping you live in the best conditions possible, getting you the fastest responses to maintenance requests, and keeping your rental rates reasonable.

The following are some quick tips that can go a long way in helping to maintain and improve landlord-tenant relations:

During your rental search…

1. Know what your expectations are before searching for a property. If your requirements aren’t offered at a particular property, then move on. Don’t expect a landlord to add an unreasonable amount of amenities or upgrades to an existing rental. There are often other units available that will meet all of your needs.

2. Submit completely accurate rental applications regardless of your shortcomings. Do not overstate your income or lie about credit problems. Landlords are increasingly open to working with challenged credit. Providing a clear explanation as to why your credit has suffered and expressing your desire to improve the situation will go a long way to sway a decision.

We always recommend a prewritten letter with this information be sent with the rental application, as it shows some planning and thought went into your process. Lying on an application is almost always grounds for denial or later termination of a lease.

3. Ask the right questions. Those questions are the ones most important to you. In most cases, landlords and agents are not required to disclose some information that may be important to you. Do not be shy when searching for a home to rent. Ask as many questions as necessary to make sure that you are comfortable with the decision you are making.

4. Get it in writing. If a landlord has promised a repair, new carpet, new appliances, or anything else will be done as a condition of your lease, then be absolutely sure to get it in writing, preferably on the lease document. Anything less opens up the chance for miscommunication and leaves an opening for problems.

I can’t remember how many times I’ve spoken to tenants who were “promised new carpeting” at some point during their tenancy and did not get it. Promises don’t get things done. Written agreements do.

5. Read your lease completely. This is an important process. You are making legally binding guarantees regarding payments, upkeep, repairs, etc. Read it thoroughly before you sign it. If possible, ask for a copy the day before signing the lease so that you have enough time to read and think about any potential questions.
Move-in time

6. Complete or request a walk-through to assess any existing wear or damage. This will alleviate many disputes at the time of move-out. Make sure this is done thoroughly and ask for a copy for your records.

7. Make sure that you know all of the pertinent property information (utility info, garbage day, mailbox number, instructions for alarms, entry systems, sprinkler systems, homeowners association rules, etc.).

By collecting all of this information upfront you can eliminate several calls to your landlord over the first weeks of tenancy. When landlords receive a flood of calls from a new tenant they instantly start to think of that tenant as high maintenance. This puts an instant strain on the relationship and can set up future problems.

An effective landlord should provide this information for the same reason, but many do not. By collecting all of this at the time of move-in you can avoid that unnecessary contact.

8. Make sure that you know the exact process for contacting your landlord in case of any questions or repair issues. Every landlord is different and each has a process for dealing with tenant inquiries.

You are best served to ask exactly how the landlord would like to be contacted. Don’t assume that texting or calling is the preferred or most effective option. By following the landlord’s preferred process you instantly become “easier to work with” than the tenant who contacts the landlord by some other means.

Landlords are also likely to respond more quickly to those who operate the way that they prefer to operate.
During your tenancy

9. Pay your rent on time. That’s easy enough when everything is going well, but what about when things are not? Your best option is to contact the landlord as soon as you see a problem arise, and work out an agreement to get on track. Very few landlords will want to evict a tenant who they believe honestly wants to pay but is having a short-term problem.

The worst option is silence. A nonpaying, noncommunicating tenant will and should be dealt with harshly.

10. Be reasonable with your requests. Most landlord-tenant issues that don’t involve money center around tenant maintenance requests that they feel are not handled adequately by their landlords.

There are many cases where the tenants are absolutely in the right and landlords have neglected their duty to provide clean, safe housing. However, in many other instances the requests made by tenants are completely unreasonable, and by utilizing a bit of patience and thought these issues can be resolved reasonably.

Handle very minor issues on your own. Almost any tenant can replace a light bulb, furnace filter, or smoke detector battery. They can tighten a door knob or put a closet door back on its track. However, these types of tiny issues constitute a huge number of service calls and maintenance costs for landlords.

If you have small issues and can’t handle them on your own, then wait until a larger problem arises that truly requires service and ask if those smaller items can be addressed as well at that time, saving multiple service trips. If you have a non-emergency issue, don’t require that it be handled on an emergency time frame.

There are many factors out of the landlord’s control that go into how quickly an issue can be resolved, including vendor schedules, time of day/week, weather, travel time, etc. Tenants need to take these factors into account and try to understand that your landlord wants to resolve your issues and wants you to be a happy tenant, as it is in their best interest.

Above all else, it’s important to remember that you are ultimately dealing with another human being. If you are speaking with a property manager or maintenance tech you are dealing with someone who can choose to help you or ultimately push your concerns aside. Your goal should be to get your questions answered and problems resolved, not to make as much noise as possible.

By portraying yourself as an honest tenant, preparing yourself for your tenancy up front, educating yourself on your lease terms and rules, and making reasonable requests using the proper channels, it is very likely that you will have a happier and more successful relationship with your landlord and a more pleasant stay in your rental property.

Ginny…We just got multiple offers on my “vacation” house listed as a short sale. And so far, we have begged and borrowed to keep our mortgage current so our credit scores will be less bruised. But now that our house is in contract, do I continue to pay the mortgage? Our debt exceeds our income due to job and benefit loss.

Here’s my bigger concern: Since we are current, I don’t want the bank to reject the offers just because we have been current, although our financial papers will prove that our debt exceeds our income. — Stephen F.

Stephen…There are a number of schools of thought and approaches to deciding whether to continue making your mortgage payments while you’re selling your home on a short sale, and your ultimate decision will require you to weigh a number of factors and see where your personal calculus of your own values and interests comes out:

Legal: Legally speaking, you have an obligation to pay your mortgage and property taxes as long as you own your home. While you might very well make the decision not to for a number of reasons (see below), it’s important to keep the legal contract you made to pay especially your mortgage in mind, as some lenders make efforts to reserve the right to come after you later for the deficiency (i.e., the difference between the sale price of your home and your mortgage balance). For this reason, it’s not a bad idea to have a local real estate attorney involved in your short-sale transaction, to help you negotiate a complete release of liability for the mortgage.

The moral/ethical perspective: Morally and ethically, some homeowners view themselves as having an obligation in line with their legal commitment to pay all these items. Others look at the various factors beyond their control that have forced them to short-sale their home, like the decline in property values and the weak employment market, and have made a decision that their personal moral imperative weighs in favor of protecting their family finances and children’s education funds. In that vein, some make the conscious decision to stop paying once they’re in a short-sale situation or on a clear path to foreclosure.

Financial/business: Once you know 100 percent that you’ll be divesting of your home in some way, shape or form, continued investments in the property can seem to easily fall into the “throwing good money after bad” bucket, looking at the situation from a strictly business and financial perspective. There is also a strong sentiment among many real estate professionals that if you keep your mortgage current, while applying for a short sale or loan modification of any sort, you decrease the chances that your lender will approve of the sale.

The theory goes that if you are current on your payments, you can’t possibly have the level of hardship you must claim (and the lender must believe you have) for them to agree to waive the deficiency amount and release you from the mortgage.

I’ve seen very mixed feelings on this in the real estate industry; on this point specifically, you should definitely talk with your listing agent and your local attorney, and take their advice into account — they might have worked with this bank in the past and be able to shed light on how staying current or falling behind may affect the success prospects of your short sale application.

Credit/ability to buy again: Right now, you are probably fixated on getting out from under his onerous debt, as virtually every homeowner in your situation is as a matter of course. But I’ve worked with a number of folks through this entire experience of going upside down, losing a home through a foreclosure or short sale and financial recovery, and I know that before too terribly long, you could very well be looking to buy a home again. Just be aware that most lenders will impose a two- to three-year waiting period after you have a short sale, if you were in default on your mortgage at the time the short sale closed (sometimes the waiting period is as long as seven years, depending on what type of loan you’re trying to use to buy your new home).

However, if you do not default on your loan and are able to get your lender to green-light your short sale, you can qualify for an FHA mortgage immediately. I don’t know your personal situation, and it’s been my experience that the majority of homeowners who have a financial hardship severe enough to even attempt a short sale need a couple of years to get back on their feet, but if you think you’ll want to buy another home anytime sooner than two years from now, you’ll need to stay current on this mortgage.

Just as there are many factors your bank will weigh in determining whether to allow your short sale to close, and on what terms, you have a lot of considerations to weigh in deciding whether to continue making your mortgage payments while you await their decision. I can’t urge you strongly enough to include your real estate agent and an attorney in your decision-making process.

Negotiation strategies differ depending on how well the home is priced and who’s on the other side. If you’re trying to buy a short-sale listing where the lender has to agree to accept less than the amount owed, the seller doesn’t have much say in the negotiations about price unless he can contribute money to pay down the loan amount.

Regardless of who you’re dealing with, you’re more likely to grab a seller’s or lender’s attention if you are preapproved for the mortgage you’ll need and can provide verification of cash for the down payment and closing costs.

Many buyers feel that cash is king. If buyers are willing and able to pay all cash with no mortgage, no hassling with the lender and no appraisal contingency, they feel they’re owed a price concession.

Not all sellers agree. Some, who are confident in the value of their home, would rather work with an offer from a well-qualified buyer who needs to obtain a mortgage but who will pay a higher price.

Before you start negotiating, you should understand as much as you can about the other party. For instance, if the sellers are moving to a retirement home, they might go for the highest-priced offer in a multiple-offer situation, even though it might not be ideal in other regards. If they are liquidating their last asset, every penny will count.

An all-cash or large-cash-down buyer might not be able to negotiate a “deal” based on the fact that no lender will be involved. But if the home is a good value and suits your long-term needs, you might increase your offer price and include a mortgage. This way, you conserve cash for other uses.

HOUSE HUNTING TIP: Many buyers don’t want to negotiate. They want their first offer to be their best offer. Usually, the only time this is effective is if yours is the only offer, the house is priced right for the market, and you offer full price. In this market, you’re better off planning for some negotiation, and not putting all your cards on the table at once.

In most areas, the home-sale market still favors buyers. A lot of sellers are selling for less than they paid. Some have to bring money to the closing. Sellers who have owned for years are selling for less than they would have years ago. It’s natural that they would want to try for the highest price possible.

Negotiations are about more than price. Generally, the fewer the contingencies or the cleaner the contract, the more attractive it will be to the seller. Closing and possession dates can become issues at the bargaining table. What’s included and excluded, time periods to satisfy contingencies, and virtually everything in the contract is negotiable.

Since everything is up for grabs, be clear about what’s not negotiable — for instance, you can’t go over a certain price. Show flexibility in areas that will hopefully be valuable to the sellers, such as buying “as is” regarding some needed repairs.

Don’t waste your time with sellers who are firm at a price that is considerably over market value. Wait until they become realistic while you continue looking. Some sellers eventually get tired of having their home listed and reduce the price to market value. Others don’t.

Sellers need to understand that buyers in today’s market will walk away from a negotiation if they feel they’re not getting anywhere or are being treated unfairly. Buyers could become suspicious or disappear if they’re told by the sellers or their agent that other buyers are lining up to make an offer when they aren’t.

THE CLOSING: A smart strategy is to defend your position while being honest and fair with the other party.

While scanning two recent studies of the U.S. housing market that focused on what some might call “vulnerable communities” or “vulnerable population groups,” at first I wasn’t discerning any real surprises, but after closer scrutiny I came to realize one of the two reports had some real eye-opening statistics.

The first study I looked at was produced by the Center for Responsible Lending and is called “Lost Ground, 2011: Disparities in Mortgage Lending and Foreclosures”; the second was done by New York University’s Furman Center for Real Estate and Urban Policy, and was titled, “Mortgage Lending in Vulnerable Communities: A closer look at HMDA (Home Mortgage Disclosure Act) 2009.”

The second study may seem dated, but it actually came out in 2011 and was using the most recent data, which happened to be from 2009.

Before I discuss the section of the one study that caught my eye, I’m going to first review the key points of the two, which involved race/ethnicity, and it’s here where the two were closely aligned.

“Lost Ground” concluded the majority of people affected by foreclosures have been white families. However, borrowers of color are more than twice as likely to lose their homes as white households.

The reason: The higher rates reflect the fact that African Americans and Latinos were consistently more likely to receive high-risk loan products, even after accounting for income and credit status.

The reports reached two principal conclusions in this regard:

African Americans and Latinos were much more likely to receive higher-interest-rate (subprime) loans and loans with features that are associated with higher foreclosure rates. These disparities were evident even comparing borrowers with the same credit-score ranges. In fact, the disparities were especially pronounced for borrowers with higher credit scores.

Racial and ethnic disparities in foreclosure rates cannot be explained by income, as disparities persist even among higher-income groups. Overall, low- and moderate-income African Americans and middle- and higher-income Latinos have experienced the highest foreclosure rates.

“Lost Ground” really focused on racial disparities, but the Furman Center’s “Vulnerable Communities” looked more at the economic grouping of low- and moderate-income, or LMI, borrowers — although, “Vulnerable Communities” also touched on ethnicity.

One of the more interesting findings in “Vulnerable Communities”: From 2008 to 2009, the number of home purchase loans issued to black LMI borrowers grew by only 7 percent compared with 25 percent for white, 38 percent for Hispanic and 44 percent for Asian borrowers. Even with this increase, lending to black LMI homebuyers was still down by half compared to 2004 and 2005.

While always startling to read about inherent biasness in mortgage issuance, even in this late date in American history with an African-American president, it’s not really all that surprising.

The data that I found to be unusual was more economic-based and more racially neutral (some would argue “not really”), and was found in “Vulnerable Communities” with its focus on low- and moderate-income borrowers.

Here’s the data point that caught my eye: While overall home purchase lending declined from 2008 to 2009, the number of home purchase mortgages issued to LMI borrowers in the U.S. metropolitan areas jumped by 26 percent from 2008 to 2009, the most recent year the data was made available through HMDA.

OK, we are in the heart of the recession, homebuying has dropped off a cliff, and the least likely economic group experienced a big leap forward in homebuying, assuming they got a mortgage because they intended to buy a home. Was that correct?

I called Josiah Madar, the research fellow at the Furman Center who did the study.

“We try not to be optimistic until we start analyzing data,” Madar said, “but everyone was surprised when we first looked at it.”

Well, any conclusions?

“We don’t really have a perfect explanation that we can really test,” Madar said. “However, we are pretty sure that the first homebuyer tax credit was why you saw that big increase.”

Madar has done some updating with recent data to try to confirm this assertion, but the 2010 data from the HMDA was not recent enough, as the tax credit was still in place during the first part 2010.

“It wouldn’t surprise us if we saw the number of loans to LMI homeowners dropped as the tax credit disappears,” Madar said. “We certainly expect a decrease in absolute numbers as eventually fewer people were able to use the tax credit.”

Another shocker: The annual number of loans issued to LMI homebuyers in the “sand states” (the recession-pummeled states of Florida, Arizona, Nevada and California) jumped by 71 percent in 2009, so that the total in 2009 was almost a full rebound to the number of loans issued to LMI purchasers in 2004.

Equally dramatic is the increased share of all home purchase loans in these states that went to LMI borrowers. Between 2004 and 2006, the LMI borrower share of all home purchases in the Sand States fell to 8 percent; in 2009, it climbed to 34 percent.

Madar was also a little fuzzy on the cause of this anomaly, but he gamely suggested a combination of tax credits and home prices.

“It could be that home prices fell in those states so much more than the other states (that) it brought home prices more in line to what people found affordable,” he said. “Home prices had previously been so expensive (that) it resulted in pent-up demand by LMI homebuyers.”

The tax credits also had something to do with it, Madar added. In fact, if readers come away with anything from his study, Madar would hope it’s the conclusion that tax credits really do help LMI borrowers.