October 19, 2008

How much of the Housing Bubble took place in Spanish?

The NYT article on Clinton Housing and Urban Development secretary Henry Cisneros's role in debauching mortgage credit standards in the name of helping lower income people get their hands on the American Dream raises a question that I've wondering about for awhile. I suspect that when the dust settles and we finally realize what an outsized role Hispanics had in mortgage defaults that set off the global credit crisis, we'll begin to realize that one reason the insanity of the Bubble years stayed somewhat under the national radar was that some of the very worst aspects of it were being conducted in Spanish. For example, Spanish language radio stations are hurting financially right now because they had been getting so much advertising from mortgage brokers and real estate agents. (When you read about some poor illegal immigrant maid taking out a $400,000 loan that she didn't understand from a predatory lender, read carefully and you'll note that the "predatory lender" who talked her into was almost always a Spanish-speaker himself.)

And there were a lot of English-speaking working-class Hispanics who got in on the bubble, too, but they are almost equally invisible to the NY-DC axis of power and influence in this country.

My published articles are archived at iSteve.com -- Steve Sailer


Veracitor said...

I realize it's a bit off your main line of thinking right now, but note that the average IQ of Spanish-speakers in this country is not so high, and we already know that IQ is correlated with, what did Seattle School District call it? "future time orientation."

It is likely that a large fraction of the people who signed fraudulent mortgage applications to get into grossly overpriced houses truly did not understand what they were doing, and didn't much care, either.

Anonymous said...

Why should they care? The White man will pay for the clean up, the White man will pay for him to have children, the White man will be blamed for it eventually anyway (even if just for letting it happen) and the White man is racist for thinking or saying or (God Forbid) doing anything about it. A win-win all around.

none of the above said...

The Salvadoran maid wasn't going to be doing any business with someone who *didn't* speak Spanish, since she probably speaks about ten words of English. And yeah, a barely-literate Salvadoran (Mexican, Guatemalan, etc.) woman who comes here to work as a maid is liable to be pretty easy to take advantage of with complicated legal documents and big financial transactions.

I'm guessing that both the "don't understand" and "don't care" issues came into play. If you're hoping to go back once you make enough money, how big a deal is it to you to have ruined your credit in the US? On the other hand, I know plenty of folks with high IQs and advanced degrees who got burned buying at the very peak of the housing market or taking on a mortgage they couldn't afford (because everyone else was doing it and everyone knew housing prices could never go down). When the smart, educated people doing business in their native legal environment and language f--k up, I'm inclined to cut illiterate peasants doing business in a foreign country and language quite a bit of slack.

For what it's worth, local Spanish stations are still advertising almost 100% financing mortgages and refinincing and such. I don't know whether the loans ever materialize, or this is some scam to get the last few dollars of Maria's money before she also loses the house.

StephenT said...

I think a good case can be made that mestizo Mexicans as a culture are by nature the most portable, least rooted people in the western hemisphere. Who would be more so? After doing nothing but shrug as their own country wallows in unlivable chaos, they easily bail out on it to avail themselves of the order and prosperity that Anglo American culture built here. Once on this side of the border they think nothing of pulling the kids out of the classroom (assuming they are there to begin with) in the middle of a school term, tying the mattresses to the top of the car, and bolting town for some other state where a cousin has assured them that menial minimum wage employment is aplenty and housing codes and truancy laws aren't enforced.
Is it any wonder that these same people feel little in the way of inhibition about defaulting on a mortgage (laws, contracts, regulations, - the entire notion of the social compact put in *writing* - are alien European concepts to the Indo-Mexican mentality, never particularly understood nor respected) and then loading up the mini-van and moving on without giving it a second thought?

dearieme said...

Due to the wonders of globalisation this striking correlation may also extend to Spain. Unless there the trouble really was due to speakers of Dutch, English and German.

some techie said...

I worked tech support for a national credit reporting agency for 18 months, quitting just this August.

Our customers were (supposedly) mortgage professionals -- loan originators, brokers, etc. A tiny but non-zero number of our callers DID NOT SPEAK ENGLISH. Any number greater than zero here is ridiculous, and the equivalent of a bank teller who doesn't speak English. A much larger number of our callers had terrible just-got-off-the-boat accents (asian and hispanic). Again, people who wouldn't be bank tellers -- unless their customers didn't speak English either. Obviously, most of those calls came from the west coast.

Reg C├Žsar said...

Don't you mean "NY-DC-LA" axis of power? Or, in this case, "NY-DC-LA-MDF"" axis?

David said...

some techie,

Pidgin English or the equivalent is prevalent in the con artist game-er, I mean financial industry *and* con artist games!

Hang up on anyone who doesn't speak good, clear mid-Western English. You won't miss much.

albertosaurus said...

Fellow Blog Readers

Steve forgot to call on you for help in authenticating this speculation. Someone out there, alas not me, has a handle on the Spanish language statistics relevant to the mortgage crisis. Send Steve the references. Send Steve the facts.

We will all meet back here next week to read Steve's summation.

mansizedtarget said...

This dovetails with the article you published, which showed housing speculation was often small scale and peaked in working class and poorer neighborhoods. This makes some sense; a sheetrocker might figure: crap, I can flip these houses too and save $$ on the labor in doing so.

Ronduck said...


Never forget to mention one of the last White urban enclaves and its' blindness. I know they have had race troubles in the past, but they aren't on the Mexican border and they therefore get to lag at least a decade behind the rest of us.

Anonymous said...

"Don't you mean "NY-DC-LA" axis of power?"

LA isn't part of the axis of power in the same way NY and DC are. LA has the entertainment industry and that's it.

michael said...

LA has the entertainment industry and that's it.

And that's not power? Nothing has been as instrumental in spreading the evil-white-men meme among the masses.

Anonymous said...

"And that's not power? Nothing has been as instrumental in spreading the evil-white-men meme among the masses."

It's a different part of the power structure. What happens in LA doesn't matter much to people in government, the news media or finance. That's one of Steve's points: the Mexicanization of America is something that most of America's elites have no experience with.