We keep satirizing this, but now a Washington Post news story really is headlined:
Minorities hit harder by foreclosure crisis“Minority homeowners have been disproportionately affected by the foreclosure crisis and stand to lose homes at a faster pace than white borrowers in the future, according to a report released Friday by a nonprofit research group. … The ‘analysis suggests dramatic differences in how the foreclosure crisis has affected racial and ethnic groups,’ the report said. ‘African American and Latino borrowers have borne and will continue to disproportionately bear the burden of foreclosures.’"
If you translate this out of the evasive passive voice and into the active voice, you come up with something more informative, namely:African American and Latino borrowers defaulted disproportionately.
But defaults couldn’t possibly be the fault of the defaulters, if the defaulters are minorities, could they? So instead, Felix Salmon of Reuters asks:Are foreclosures racists?
“If you’re a high-income Latino with a mortgage, you’re almost twice as likely to be facing foreclosure than a high-income non-Hispanic white person. And in general, the foreclosure crisis is hitting blacks and Latinos much harder than it is whites, according to a startling new report from the Center for Responsible Lending.”
Now, you might think that foreclosure rate has something to do with, say, blacks and Hispanics having remarkably fewer financial assets to use as safety cushions in case housing prices don’t continue to rise. After all, a 2007 Federal Reserve Board report to Congress noted:“Black and Hispanic families are less likely than non-Hispanic white families to have any financial assets, so the disparity in median financial assets for all families (rather than just those with financial assets) is even larger, with the overall medians for black and Hispanic families roughly 5 percent to 7 percent of the non-Hispanic white median.”
Moreover, African-Americans and Latinos are less likely than whites to have prosperous relatives who can help them out with a loan if they are in danger of defaulting.
You might think that, but being aware of those facts just shows you are a racist. Salmon writes:“I’ll hazard a guess and say that this probably has something to do with a lot of middle- and high-income Latinos in California and Arizona being sold subprime mortgages, even when they qualified for a prime loan.”
Read the whole thing there and comment upon it below.
Posts
44 comments:
They call themselves the 'Center for Responsible Lending'. LOL.
Why is it that Asians have a higher foreclosure rate than whites? It violates the usual pattern. Who are these Asians specifically?
The bankers have a definite bias in this whole issue, at least as much as the blank slate lefties. Bankers want to loan as much money as possible at as high an interest rate as possible. Increased minority lending fits both of those goals. Of course bankers also want their money back, but since the government has bailed them out at every opportunity, that's not a problem either. It's not unlike loans to Brazil in the '80s or Mexico in the '90s. Find a shaky borrower, get them hooked, squeeze them for as long as possible, then scream systemic crisis and get a U.S. bailout. The lefty journalist helps provide a foil, shifting the cynicism of the bankers into altruism - which is crucial to gain sympathy or at least acquiescence of the taxpayer when the loan collapses.
It's a pretty good model for making billions of dollars without any skills other than bribing the right politicians.
I like the colors in your charts.
Notice the passive language.
"Minorities hit hard..." as if they're not complicit in the problem; it just happens to them by a bunch of racists.
I have a great idea. Since rich liberal Jews are at the forefront of 'end racism in lending' racket and since they insist that blacks and browns are just as responsible as whites, why not demand that Jews lend a bulk of their personal fortunes to blacks and browns? And if things go bust, no bailouts for the big Jewish banks in Wall Street by mainstreet.
Btw, any comparative data on Jewish foreclosures vs white gentile foreclosures? I'll bet white gentile foreclosures are higher. It must due to Jewish anti-goyitism.
Those who cannot remember the past are condemned to repeat it.
This aphorism is generally cited to warn people that if they are among those who fail to learn from history, they will suffer. The assumption being that most people in most cases learn from history. Bad assumption.
It is more reasonable to assume that almost no one ever learns a lesson from history.
Herodotus - the Father of History - provides the first example. He recounts the Persian Wars. He tells of how Xerxes being thwarted at Thermopylae found a path around the choke point and came upon Leonidas from the rear. This might be considered the first lesson of history. Yet several centuries later when Brennus the Celt invaded Greece and was stopped at the exact same Thermopylae choke point he too found the path over the mountains and fell upon the Greeks from the rear.
Nobody else on Earth except the Greeks had written history but it didn't seem to have helped them very much.
More recently the lesson of Chamberlain and appeasement has been drummed into our public ear for more than half a century. Aggressors must be opposed early and consistently. There is evidence that the administrations of Eisenhower and Kennedy heeded that lesson for a while but today North Korea and Iran are provoking the Western democracies just as Hitler once before had provoked them. The West is being tested again today as it had been in the 1930s.
Hitler of course wasn't the first expansionist aggressor. Chamberlain I'm sure was warned by Churchill and others about how to handle aggressors and they probably cited historical precedents. But Chamberlain didn't want to listen. He had a theory - "Peace in our time" - that comforted him.
Similarly today we have a plethora of historical evidence that NAMs have performed badly in all nations everywhere for all time. Yet we prefer to be comforted by our theory of the benefits of racial diversity.
On balance the record (the history of history) seems to show that no one has ever paid much attention to lessons of the past.
About 4 months ago I refinanced my mortgage with Quicken. I responded to an advertsement on TV. I communicated with them exclusively via telephone and e-mail (they were in Michigan and I live in California) The only people I physically saw were the appraiser and the notary who confirmed the signatures.
There was absolutely no way for the loan officer to know what my skin color, if I had kinky hair, or what ethnic group or religion I belonged to. The only information they had to verify was my tax returns, Credit score, and employment history.
Also, being an insurance broker, I am acutely aware that business sold to "new arrivals" tends to be sold by "not quite as new arrivals" from the same ethnic tribe. Living in the Bay Area which is chock full of immigrants I would be seemingly in position to reap the new customers. Truth be told, that business usually gets bagged by a co-ethnic. I am sure that the loan business the same.
"In the cases of 1914, 1929, and 1941, a huge amount of intellectual effort has been devoted to understanding these precipitating events. In contrast, the Main Stream Media account of the causes of the Housing Bubble and Bust are still severely lacking,"
I also find it baffling that there is little discussion of how housing caused the economic mess and what federal housing policy should be. Meanwhile the FHA is backing mortgages with a 3% down payments which could easily go underwater if interest rates rise.
I disagree with you that this is all do to helping out minorities. It is the belief of many that all Americans should own a house. This goes back a long way to programs such as the homestead act. Many whites could not afford a home at current prices so politicians would be motivated to find ways for them to purchase even if there were no problems with NAM. Incomes were also stagnant for many whites so equity lines were promoted as a way to keep up living standards.
Oh oh. Disparate impact. So they will have to start forclosing on white people even though they are paying their mortgage (hmmm...that could get awkward) or not forclosing on NAMs even though they are not paying their mortgage. Maybe the gobermint could pay the NAM mortgages.
shocking
Never mind the stooges out front. How about some limelight for the minority of unscrupulous brainiacs who organized and benefited from all the securitizing and bailing?
Off Topic:
... Val Kilmer was quoted -- misquoted, he says -- describing his rugged corner of New Mexico as "the homicide capital of the Southwest."
He went on to avow that "80% of the people in my county are drunk," requiring him to carry a gun for protection ...
New Mexico v. Val Kilmer: Payback Time
" It is the belief of many that all Americans should own a house. This goes back a long way to programs such as the homestead act. Many whites could not afford a home at current prices so politicians would be motivated to find ways for them to purchase even if there were no problems with NAM."
The same could be said of public education. And similarly it is whites who are actually able to hold up their end of the bargain.
"Who are these Asians specifically?"
Chinese.
The world's gambling race.
I would say Asians have a higher foreclosure rate because of relative ethics and morals. I know tons of Whites who continue to hold on to their underwater mortgages, because the idea of them voluntarily violating their promise to pay is literally unthinkable, and they react to it as a moral issue, rather than a financial one.
My guess is that a lot of the defaulting Asians had investment properties. When prices deflated, they decided to strategically default on their underwater properties.
One reason for lower rates of white defaults might be that America was 90% white in 1965. Most of the people with homes that are fully paid for are undoubtedly older white people, and a big percentage of the people who are within 5 or 10 years of being mortgage free are probably also white.
Blacks are notorious for running up colossal credit card bills -- their need to HELOC would have been higher than any other group's.
"I also find it baffling that there is little discussion of how housing caused the economic mess and what federal housing policy should be. Meanwhile the FHA is backing mortgages with a 3% down payments which could easily go underwater if interest rates rise."
There is a lot of discussion but it gets little coverage in the MSM because it's owned and run by a few liberals.
Chamberlain I'm sure was warned by Churchill and others about how to handle aggressors and they probably cited historical precedents. But Chamberlain didn't want to listen. He had a theory - "Peace in our time" - that comforted him.
No, Chamberlain had a theory - don't fight a war for which you are not prepared. Instead, stall for time and build up your war capacity. The plan worked well. Instead of getting crushed in 1939,
"Why is it that Asians have a higher foreclosure rate than whites? It violates the usual pattern. Who are these Asians specifically?"
Remember: all post 1965 immigrants in the US are here for the money -- or low cost higher education which leads to high wage employment -- medicine, dentistry, ophthalmology, accounting, financial engineering, etc.
East Asians saw the real estate boom as a chance to get in on the ground floor for easy money. They are gambling addicts by nature. Under normal circumstances, they are financially responsible, but the California Real estate market was like a big casino from the end of the tech boom (2001) until about 2007.
And many of the earlier arrivals from China (late 1980's to early 1990s) had already figured out that you could buy ramshackle properties vacated by whites fleeing Diversity and high taxes, hire Mexicans to do a little cosmetic work, and sell them to their co-ethnics for huge profits, especially during the tech boom. (It's a well known fact in the real estate biz that Chinese and Indian home buyers don't do home improvement.)
So there already existed a big infrastructure of mandarin speaking people in the contracting, real estate, and mortgage broker businesses ready to assist the flood of newly arrived Chinese tech immigrants realize their boundless material ambitions through buying and renting properties. But Fortuna's wheel spun downward, and a lot of these smart Asians ended up with not so smart investments.
"
One reason for lower rates of white defaults might be that America was 90% white in 1965. Most of the people with homes that are fully paid for are undoubtedly older white people, and a big percentage of the people who are within 5 or 10 years of being mortgage free are probably also white.
"
Most, if not all, of the studies quoted concern only mortgages originated during the real estate bubble, i.e. in the last 8 or so years. Paid off mortgages not a factor.
Tanstaafl is correct. None of this is being done by accident, particularly the destruction of the Western economies.
Something we'll never find out is what percentage of the white mortgage borrowers in California in 2004-2007 were immigrants from the ex-Soviet Union and the Middle East. A lot, I would guess.
I have personally met an illegal alien who "owned" five houses during the bubble. He worked part time (less than 20 hours per week) in a warehouse labor job at $10 per hour.
That being said the fact that a lot of white people see paying the mortgage as a moral imperative is going to hurt white wealth. If you bought in the bubble and are still paying the mortgage you are guilty of financial ineptitude. Prices in the bubble were fraudulent. I will happily pay a fair contract but not one where the price was a fraud.
I knew a black guy who bought a house hoping to make a nice profit. Even tnough he could afford the note, when he got upside downhe stopped paying it and stayed in the house until it forclosed. His credit is dinged, but he got six months free rent. I lost track of him so I don't know whether he has another mortgage now, but I wouldn't doubt it. Was he more likely to walk away from his mortgage because he was black? Who knows?
"Something we'll never find out is what percentage of the white mortgage borrowers in California in 2004-2007 were immigrants from the ex-Soviet Union and the Middle East. A lot, I would guess."
Perhaps it could be inferred from a census of real estate agent surnames.
"Hitler of course wasn't the first expansionist aggressor. Chamberlain I'm sure was warned by Churchill and others about how to handle aggressors and they probably cited historical precedents. But Chamberlain didn't want to listen. He had a theory - "Peace in our time" - that comforted him."
Oh ! and the English were never aggressors. The only way to ask an English man to leave your country was by aiming a big gun at him!
In 2003, 2004, and 2005 mortgage brokers were constantly being pushed to increase lending to non-Hispanic whites. This is because banks can't legally acquire other banks unless they have satisfactory Community Reinvestment Act Ratings (CRA) based upon U.S. Federal Reserve audits. Banks that increase their non-Hispanic White lending get extra CRA points. The FRB is HUGE on promoting diversity.
In the mid-1990's only about 100,000 mortgages a year were made using the Desktop Underwriting (DU) systems. But, by the mid 2000's about 100,000 mortgages per day were being processed by DU systems. Therefore banks could now quickly underwrite mortgages, package them in financial instruments to Wall Street, and increase their CRA ratings all at the same time.
One of the three C's of lending (besides Capacity and Collateral) used to be Character. Obviously, it would be illegal these days to meet someone and deny them a loan based on Character. DU systems may be able to quickly underwrite a loan but they can't judge a persons character.
That's the 800 pound gorilla in the room: Character. Covey defines Character as being a combination of Integrity, Maturity, and the Abundance Mentality. The Abundance Mentality is reminiscent of the phrase "the pursuit of happiness." The founders meant by Happiness it's original meaning which was basically "a chance to be successful."
In summation, I think that the reasons many of these people are having foreclosures is because they haven't embraced (or don't have the ability to embrace) the Western Culture values which make up a persons Character. I think Republicans, Democrats, and Technology all played a part in causing the Foreclosure Crisis.
It wasn't Spike Lee; it was David Ehrenstein.
Idealizing non-Whites to demonstrate moral superiority by "an elect" in a sort of debased Calvinism. [Mormons are also prone to this idealization of non-Whites, even though they themselves are very neo-Calvinist, i.e. a pre-destined elect divinely "saved." For those who doubt, check out BYU's channel on Direct TV for some of the preaching/lectures.]
C'mon, Whiskey. Surely you understand that the Calvinistic concept of "an elect" is derived from the Old Testament notion of the Jews as God's "Chosen People." Indeed, Mormons refer to non-Mormons as "gentiles."
"(Entertainment Weekly says if you don't like Jaden Smith, arrogant and spoiled spawn of Will Smith, you are racist)"
Why, exactly do you consider Jaden Smith "arrogant and spoiled"? I haven't seen Karate kid, because I thought, from the trailers, that he appeared to be wooden. However watching you link I have to admit I was highly impressed. A 12 year old who can beat David Letterman at the "Sardonic and Ireverant" game? Are you kidding me, Letterman WROTE THE RULES in that game! that young man is one to keep an eye on.
Mercer: I also find it baffling that there is little discussion of how housing caused the economic mess and what federal housing policy should be.
But what, in turn, was the cause of the problem in housing?
2010 Statistical Abstract of the United States
Section 1, Population
Table 9. Resident Population by Race, Hispanic Origin, and Age: 2000 and 2008
pop.pdf
Not Hispanic White alone, 2008
45 to 49 years: 15,964K
40 to 44 years: 14,085K
35 to 39 years: 12,981K
30 to 34 years: 11,456K
25 to 29 years: 12,740K
20 to 24 years: 12,949K
15 to 19 years: 12,903K
10 to 14 years: 11,660K
05 to 09 years: 11,222K
00 to 04 years: 11,065K
In terms of those birth years [1959 to 2008], the total population of the USA varied thusly [in five year increments; see here and here]:
1959 to 1963: 177,830K to 189,242K
1964 to 1968: 191,889K to 200,706K
1969 to 1973: 202,677K to 211,909K
1974 to 1978: 213,854K to 222,585K
1979 to 1983: 225,055K to 234,307K
1984 to 1988: 236,348K to 245,021K
1989 to 1993: 247,342K to 260,255K
1994 to 1998: 263,436K to 276,115K
1999 to 2003: 279,295K to 290,704K
2004 to 2008: 293,310K to 304,483K
So over the course of those 50 years [1959 to 2008], the Caucasian population of the United States collapsed by more than 30 percent [from roughly 16 million per five years down to roughly 11 million per five years], whereas the total population of the USA exploded by 67 percent [from roughly 180 million to roughly 300 million].
BTW, the numbers for Pacific Rim Asians are even WORSE than the numbers for Caucasians.
Bottom line: There just aren't enough up-and-coming 20-somethings & 30-somethings, with sufficiently high IQs, to support any sort of a long-term bubble in $100,000+ real estate [and you can simply forget about the $1,000,000+ market].
So if you want to see the future of the real estate market in much of the USA [especially in the major cities of the Blue States], then look to Detroit.
PS: A word to the wise - there is a tiny little trailing blip in the Caucasian population numbers, which bumps back up to about 13 million [per five years], before dropping again to 11 million. If Sarah Palin can win in 2012, and if a GOP Congress and a President Palin can enact some tax relief in 2013, and as that 13 million starts to move into their late 20's and early 30's, circa 2013, then it is possible that we MIGHT see the real estate market pick up just a little, in the 2013 to 2014 timeframe.
And if that is the case, then sell EVERYTHING you still have in the way of real estate investments at that point, in anticipation of the Caucasian population then collapsing again, from 13 million down to 11 million [per five years], after which the only thing that could possibly save the USA real estate market would be massive sales to the new Chinese [and Indian] millionaires and billionaires.
Whiskey,
Howard Stern grew up in Roosevelt, Long Island and was a kid when blacks started moving in. On his old show, he often joked about watching his liberal neighbors move out in the dead of night in reaction to the changing demographics. He also frequently talked about being tormented by blacks. He knows the score and is one of the few people to openly talk about it. Too bad he left terrestrial radio for satellite, which no one listens to.
"Bottom line: There just aren't enough up-and-coming 20-somethings & 30-somethings, with sufficiently high IQs, to support any sort of a long-term bubble in $100,000+ real estate [and you can simply forget about the $1,000,000+ market]."
Don't worry: there will always be enough Turks, Persians, and Hindus in America to buy up all the luxury houses and convert them into dodecaplexes for large Mexican families paying with section 8 vouchers. I've observed this in neighborhoods near Lake Merritt in Oakland, CA, where the most lucrative local industries are now hooking, meth, and Korean barbecue.
"Too bad he left terrestrial radio for satellite, which no one listens to."
"Which no one listens to", huh?
I thought that's why they gave him 100 million, so that someone would listen to it.
Maybe, it's just that the toothless, low-IQ morons who think he's funny can't afford the $13.95 a month?
Felix Salmon wants the whole argument won right there in the framing (as to avoid a reasoned debate):
-------------------------------
Ex)"Minorities hit harder by foreclosure crisis"....
Ex2)“Minority homeowners have been disproportionately affected by the foreclosure crisis and stand to lose homes at a faster pace than white borrowers in the future....
Ex3)"Are foreclosures racist?"
----------------------------------
These opening parenthetical statements present his "argument" right off the bat, framing any opposition as racist, before any ink is spilled on facts to back it up.
Unfortunately, with our attention spans getting shorter and shorter, many people of no dishonest intent are so intellectually lazy as to credit Salmon's side with winning the argument even before a debate could begin.
Conservative wordsmiths have to find a way to present at least a portion of their argument right there in the framing in a way low-browed enough that anyone can immediately sense it, and that frames them, the conservatives, as the victims of present arrangements.
Vox Day had a great point a few days back when he noted that, "once victimhood becomes sanctified, all the attention-whores will want to be victims", in reference to the hordes of women that campus feminists claim have been raped, but really just woke up in the morning wishing they didn't sleep with John X.
You'd think our investment class would wake up in the morning wishing they didn't sleep with mortgage backed securities full of multicult loans, but since the taxpayer (both born and unborn) are the one's who wound up with the financial STD, maybe they (Larry Kudlow's precious "hardworking investors")are ready to head out to da'club again....
m
BTW--That was a fine article, full of irrefutable proof to the honest reader
Something we'll never find out is what percentage of the white mortgage borrowers in California in 2004-2007 were immigrants from the ex-Soviet Union and the Middle East. A lot, I would guess.
Steve, I've had a question that's been bugging me for a few years and thought you might know the answer. Are those huge and hideous McMansions that have popped up all over the SF Valley in the past 4-5 years, especially in the hills south of the blvd, primarily the creations of said demographics?
Whiskey: "You see the same exact thing in Germany, where you might recall there are no more Jews"
Well, not only are they 118,000, they still manage to be the fastest growing population in the world.
I won't be sitting shiva with you.
"Don't worry: there will always be enough Turks, Persians, and Hindus in America to buy up all the luxury houses and convert them into dodecaplexes for large Mexican families paying with section 8 vouchers."
And the spacious yards can be zoned and subdivided to build low rise apartments for fertile but income challenged Spanish speakers. This type of post modern American housing has already sprouted up in Oakland and Richmond on nearly every bit of available space near freeways and train tracks, in abandoned industrial zones, and on odd residential lots.
During the reign of Richard Daley the First, the Chicago black poor were warehoused in large high rises, but in present day California, Mexican colonists are shoe boxed in dingy, poorly maintained rental units owned by a fruit salad of mercantile minorities -- Vietnamese-Chinese, Persian, Indian, Jewish, Korean, and Armenian. Welcome to the new ownership society.
Gotta love those positive cash flow rentals that bring global greed, economic exploitation, welfare statism, and poverty to your doorstep!
"Anonymous said...
Those who cannot remember the past are condemned to repeat it.
................
On balance the record (the history of history) seems to show that no one has ever paid much attention to lessons of the past."
Agree with your general point, and I liked your example of Thermopylae. The Hitler thing is misapropos however.
Iran is not Germany. Ahmenidjad is not Hiter, and it is not 1939. It is never 1939. It was once, but will never be again.
Reading the wrong lessons from history is as much a failing as ignoring it altogether.
Now that boom times for ethnic home flippers have passed, I have noticed new get-rich-quick strategies emerging in the East SF Bay Area based on making money off government assisted blacks and Hispanics. Indians and Koreans have become very aggressive about opening up two kinds of businesses: dialysis centers -- there is one practically in every run down strip mall -- and supermarkets that cater only to customers using WIC checks and food stamp cards. Pretty much all obese young Hispanics are prediabetic and many will progress to nephrotic syndrome and full kidney failure by middle age. If there is a way to make a tidy sum off their misfortune, why not? I guess it's better than opening up more liquor stores, but they do that, too.
It occurs to me that more (Christian) whites don't set up these kind of businesses because they feel uncomfortable about profiting from the misfortunes of the poor. Yet, if you hail from the third world, you come from cultures where there are only the prosperous few and the abundant poor. The only way to get rich is to figure out a way to make money from a lot a small transactions with your poor neighbors. Hence the prevalence of South Asians in convenience stores selling gas, overpriced candy bars, and expired milk. Or chauffeuring around hookers and people trying to buy drugs in their taxi cabs. It's the Punjabi version of the Horatio Alger story.
Hey Steve,
You might find this story interesting: http://www.zerohedge.com/article/stuy-town-–-who-got-“stuffed”
It speaks to some of the regulation gaming that was going on and the false market signals such gaming was throwing off. Free markets are anything but. As we increasingly interfere with them we run into increasingly dire unintended consequences. It is remarkable that Barry Ritholtz, an otherwise sharp guy, has such a cognitive blind-spot on this one issue.
When will "Truth" pop up to talk about Iceland - exhibit A in his contention that Sailer's "Diversity Recession" was false?
Then again, when one says so many transparently idiotic things, as "Truth" does, it must be difficult to keep them all straight.
"When will "Truth" pop up to talk about Iceland - exhibit A in his contention that Sailer's "Diversity Recession" was false?"
I was going to, but you beat me to it, and did an excellent job to boot, my friend.
Anything that I could add about Iceland at this point would be superfluous.
Post a Comment