African-Americans in Washington are living on the knife’s edge of the subprime mortgage crisis, a city government study has found.

Nearly seven out of every 10 of the loans in D.C. have gone to African Americans, most of them poor or lower middle class, the city’s Department of Insurance, Securities and Banking report found Monday.

And, experts say, the bill is coming due: Foreclosures in D.C. have doubled between 2005 and 2007 and have continued to rise through the first quarter of 2008. Most of those foreclosures are coming in African-American neighborhoods in Wards 4, 5, 7 and 8.

“It’s going to get worse before it gets better,” said Urban Institute researcher Peter Tatian, whose group contributed to Monday’s report. “I think we need to be concerned.”

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Most experts said they weren’t surprised by Monday’s findings but were glad to have an objective look at what many had been hearing anecdotally. People with poor credit or low income used subprime loans to buy homes in the millions and the bonanza floated the American economy for the first part of the century. But the high interest rates and often hidden fees and costs have continued to trap borrowers.

For observers of D.C.’s real estate market, the subprime crisis threatens to blight long-suffering neighborhoods that once seemed ready to crawl out of endemic poverty.

“We knew the implosion was going to impact black and Latino homeowners,” said Aracely Panameno of the Center for Responsible Lending. “We’ve been last in, and first out. It’s really sad.”

D.C. Councilwoman Mary Cheh, D-at large, has introduced a series of bills to attack predatory lending and to give strapped homeowners room to beat back their debt. But “it’s just not enough,” she said.

“We’re left with the people and the communities that are suffering,” Cheh said. “Because people will lose their homes.”

The report’s recommendations include offering financial education for District residents, creating a judicial foreclosure process, and requiring lenders and brokers to determine if the borrower has the ability to repay the loan.

bmyers@dcexaminer.com