As a joint conference committee of Congress works to reconcile two versions of the largest Wall Street financial reform since the 1930s New Deal, a new report from the Center for Responsible Lending (CRL) details how widespread foreclosures have drained an estimated $350 billion from communities of color.

These losses are attributable to both foreclosed homes and nearby neighbors whose property values plummeted as a result of neighbors' foreclosures. In many instances, homes near foreclosures leave nearby homeowners owing a mortgage far more than their home is now worth.

This loss of wealth may exceed the total cost paid by the Gulf Coast states in response to Hurricane Katrina.

According to Foreclosures by Race and Ethnicity: the Demographics of a Crisis, for every 100 African-American homeowners, 11 have either lost their homes or at imminent risk of foreclosure. For Latino families, the figures are even worse – 17 of every 100 Latino homeowners are affected by foreclosures.

"Whether we're talking about oil spills or housing catastrophes, it's clear that America needs to invest in prevention, clean-up and recovery," said Mike Calhoun, CRL President. "As Congress works to finish financial reform legislation, the rules on home lending need to get stronger, not weaker. We need to make sure a foreclosure crisis of this type never happens again; and though so many homes have been lost, it is not too late to prevent more damage."

The report cites lending industry figures showing that the percentage of homes in some stage of foreclosure in the United States is the highest on record and five times the norm. According to CRL's research, from January 2007 through December 2009, 2.5 million foreclosures were completed nationwide. Another 5.7 million borrowers are at least two or more payments behind, leaving them at imminent risk of foreclosure. The vast majority of homes lost to foreclosures were originated from 2005 through 2008 for owner-occupied borrowers, not speculators.

A related June case study by CRL shares the ongoing plight of a 79-year-old widow whose only income is social security. When Mrs. Louise Golden's husband, Stanley, suffered a stroke and their income was drowning in medical costs, they decided in 2006 to refinance their long-time home, using the equity in the house to pay off bills. She and her husband thought they were getting a 30-year low fixed-interest loan.

Golden passed the following year and while his spouse was still grieving, she learned that their loan was actually an adjustable rate mortgage or ARM. The payments that began at just over $1,000 a month rose in excess of $1,700 a month – more than her modest monthly income.

Unfortunately, Mrs. Golden's case is repeated throughout much of the nation and the problem is particularly severe in Maryland's Prince George's County where, in 2009, the number of foreclosure fillings – 13,412 – accounted for 31 percent of similar filings throughout the state.

According to the Maryland Department of Housing and Community Development, one out of every 24 homes in this county was subject to a foreclosure filing last year, compared to the statewide rate of one out of 54. Additional CRL research shows that without regard to ethnicity or race, 24 states and 38 counties will also experience a loss of over $1 billion each in local house prices and tax bases. Among the 24 affected states, the 10 worst facing declines in house values and tax bases are: California, New York, Florida, Illinois, New Jersey, Maryland, Arizona, Massachusetts, Virginia and Pennsylvania.

As an independent research and public policy organization, CRL is among the advocates that are keeping a close eye on the House and Senate Conference Committee on financial reform to ensure that the policy reforms for mortgage lending are preserved in the final bill.