Center for Responsible Lending — a non-profit organization that strives to eliminate abusive lending and protect economic opportunity for all — recently conducted a study in California to determine the “who, the what and the where of foreclosures in the Golden State.”

The “first-of-its-kind” report, which was dubbed “Dreams Deferred: Impact and Characteristics of the California Foreclosure Crisis,” analyzed more than a half-million statewide foreclosure cases.

The results?

Latinos account for nearly half (48 percent) of defaults in the state. Whites were a close second (35 percent), while African Americans (8 percent) and Asians (6 percent) made up a relatively small portion of the foreclosure melting pot.

Additionally, “modest” homes — not “McMansions” or other oversized/overpriced properties — were the overwhelming primary victims of foreclosure, totaling a whopping 75 percent of the 500,000 homes in the study.

The reasons?

San Francisco Chronicle explains:

“Latino and African American borrowers were more likely to acquire higher-cost subprime mortgages with loan terms that generally increased the risk of default, compared with safer loans made to similarly situated non-Hispanic white borrowers…. According to the US Census Bureau, between 2000 and 2007, Hispanic homeownership grew 47%. Over that same period, homeownership nationally grew by only 8%. And, according to the Federal Financial Institutions Examination Council, in 2005 alone, mortgages to Hispanics jumped by 29%, with expensive nonprime mortgages soaring 169%.”

To correct the disproportionate problem, Center for Responsible Lending recommends that judges be allowed to “cram down” loan balances in default and increase funding for organizations that provide legal assistance and housing counseling.

We’re answering this question a lot lately more than likely because of the headlines Citigroup — among the largest financial institutions on the planet — has recently made with its support of the measure.

So let’s touch on it real quick just to ensure that everyone is familiar with the term.

A “cram down” is a forced loan modification that is determined by a judge (not a lender) in bankruptcy court. It essentially gives a judge the power and authority to adjust a home loan with the intent of making it more affordable for the cash-strapped homeowner.

Typically, lenders such as Citigroup don’t support “cram downs” — they would rather negotiate and modify loans on their own terms … or not at all.

But with the shaky state of the economy — and more and more troubled mortgage borrowers falling deeper into debt — it appears that Citigroup is willing to go along with a possible major plan to help alleviate the foreclosure situation.

Is it an effective solution?

The Mortgage Bankers Association doesn’t seem to think so, arguing that “allowing bankruptcy courts to reduce the size of a home loan will add considerably to borrowing costs for future homebuyers.” In addition, the American Bankers Association contends that “overly broad mortgage cram-down authority and other provisions will harm thousands of banks across the country that have made, and continue to make, good loans.”

Currently, as of this posting, bankruptcy judges can not “cram down” mortgages on primary residences — it is limited to certain personal loans and mortgages on vacation homes.

That could all change very soon, however, with a new regime taking control of the White House next week. Stay tuned to Foreclosure.com for more updates on the “cram down” situation.