February 3, 2014

Here we go again ...

From the New York Times:
Race Gap on Conventional Loans

African-American and Hispanic borrowers have been largely shut out of the conventional mortgage market, according to a new report from Zillow and the National Urban League. Citing 2012 loan data reported under the Home Mortgage Disclosure Act, along with results from a Zillow poll of 700 mortgage applicants in December, the analysis found that whites accounted for about 69 percent of all conventional mortgage applications. The share of applications filed by blacks was under 3 percent; Hispanics represented only 5 percent.

100 - 69 - 3 - 5 = 23% of new conventional mortgages going to whom?
Black and Hispanic borrowers are far more likely to apply for low-down-payment loans insured by the Federal Housing Administration. About 57 percent of black applicants and 60 percent of Hispanic applicants applied for F.H.A. loans, compared with 30 percent of white applicants. 
Access to financing that requires as little as 3.5 percent down is key for minority applicants, who on average have lower incomes and credit scores than whites, said Stan Humphries, Zillow’s chief economist. They also have far lower rates of homeownership, which makes it harder to accumulate wealth over time and across generations. “Higher down-payment requirements have had the biggest impact on minority applicants for conventional mortgages,” Mr. Humphries said. “They just don’t have the savings nonminority groups have.” 
And their conventional mortgage applications are more likely to be denied. One in four black applicants were turned down, compared with one in 10 white applicants, the report said. 
As conventional lending standards have tightened, F.H.A.-backed loans have become crucial to maintaining credit access in minority communities. But at the same time, Mr. Humphries said, F.H.A.’s dominance among such borrowers hints at a problematic trend: “a different path to financing based on your race and ethnic group.” 
And the F.H.A. path can be costly. Although F.H.A.-backed loans offer the initial advantage of less money down, their mortgage insurance premiums are considerably higher than premiums on conventional loans. 
Julia Gordon, the director of housing finance and policy at the Center for American Progress, a liberal research group, has concerns about what she calls “the dual housing market,” and says she believes the conventional market ought to be making lower-down-payment loans more widely available. “Like all the other separate-but-equal arrangements,” she said, “this is not good for consumers or the market or for taxpayers. We are seeing creditworthy people who should be able to get loans in the conventional market but can’t.” 
Ongoing discussions in Washington about how to wind down Fannie Mae and Freddie Mac should include a commitment to ensure that lenders make credit available equitably, she added. 

With apologies to Wordsworth and Milton:

                     Las Vegas, 2014
MOZILO! thou shouldst be lending at this hour:
    Exurbs have need of thee: they are a fen
    Of prudent finance: kitchen, bath, and den,
Fireplace, the heroic wealth of marble shower,
Have forfeited their late-lost subprime dower
    Of higher leverage. We are low-debt men;
    O raise us up, return to us again,
And give us zero down liar loan power!
Thy face was like an Orange, and golfed a lot;
    Thou hadst a voice whose sound was like TV:
    Pure flapdoodle, correct politically,
    So didst thou at Sherwood Country Club play,
In devout PCness; and yet thy stock
    The lowest return on investment did pay.
 
Here's the original:

                     London, 1802
MILTON! thou shouldst be living at this hour:
    England hath need of thee: she is a fen
    Of stagnant waters: altar, sword, and pen,
Fireside, the heroic wealth of hall and bower,
Have forfeited their ancient English dower
    Of inward happiness. We are selfish men;
    O raise us up, return to us again,
And give us manners, virtue, freedom, power!
Thy soul was like a Star, and dwelt apart;
    Thou hadst a voice whose sound was like the sea:
    Pure as the naked heavens, majestic, free,
    So didst thou travel on life's common way,
In cheerful godliness; and yet thy heart
    The lowliest duties on herself did lay.
         

37 comments:

Anonymous said...

In the end it is all about power: racism, class warfare -- you name it. Those with power and most of the wealth want to keep it, and they will do anything to maintain the status quo. We don't need healthcare reform because they do not have a problem with the healthcare system: they can afford it. They don't want any meaningful financial reform because the current system works to their benefit.

In 1860 Southerners opposed the end of slavery and went to war because it was the mainstay of their wealth and power. The only U.S. president who was as openly hated as President Obama is was President Lincoln. There was/is a race issue in both cases, but the uniting theme is about holding on to power.

What I find most hypocritical and offensive about today's "Jim Crow" efforts to hold onto power is the total unwillingness to demonstrate the problems that Voter ID and gerrymandering are "innocently" supposed to solve. What evidence is there of voter fraud? What problem of representation is solved by putting districts with little in common except party voter registration together, especially when in involves contorting geography?

These ploys can not working indefinitely. Demographics will overwhelm gerrymandering eventually, and Voter ID laws can be fought with drives to make Voter IDs available to everyone eligible to vote. What I am afraid of is that these clever ploys will be replaced by more desperate means that will lead to open conflict.

Marc Pisco said...

"Thy soul was like a star, and golfed a lot".

Very fine stuff. Splendid!

Anon87 said...

OT: Wikipedia is ‘very masculine,’ so feminists pledge to fix it

Anonymous said...

Boring!

Henry Canaday said...

Why don’t we set quotas for home ownership, home mortgages, conventional home mortgages and mortgage-application acceptance rates for each race and ethnic group as functions of each group’s legitimate birth rate?

Shouting Thomas said...

Why not blow the economy to hell again?

The perfect Utopia will be constructed after one of these economic debacles.

Just got to keep trying.

Cattle Guard said...

When it comes to that poem, I liked the Chesterton version about Stilton cheese best.

heartiste said...

Steve, I think a part of you knows no one currently in power will ever listen to you, and that same part of you wants to imprint your voice in the public discourse for the glorious day when you can belt out in triumphant glee...

"I told you so".

Here's to that day, and here's to you enjoying to the fullest every minute of it. You will deserve it.

Anonymous said...

"100 - 69 - 3 - 5 = 23% of new conventional mortgages going to whom?"

Asians, I suppose. You know, the minority group that does not get name-dropped a lot in liberal circles, because they don't fit the narrative.

fish said...

Anonymous said...

In the end it is all about power: racism, class warfare -- you name it. Those with power and most of the wealth want to keep it, and they will do anything to maintain the status quo. We don't need healthcare reform because they do not have a problem with the healthcare system: they can afford it. They don't want any meaningful financial reform because the current system works to their benefit.

In 1860 Southerners opposed the end of slavery and went to war because it was the mainstay of their wealth and power. The only U.S. president who was as openly hated as President Obama is was President Lincoln. There was/is a race issue in both cases, but the uniting theme is about holding on to power.

What I find most hypocritical and offensive about today's "Jim Crow" efforts to hold onto power is the total unwillingness to demonstrate the problems that Voter ID and gerrymandering are "innocently" supposed to solve. What evidence is there of voter fraud? What problem of representation is solved by putting districts with little in common except party voter registration together, especially when in involves contorting geography?

These ploys can not working indefinitely. Demographics will overwhelm gerrymandering eventually, and Voter ID laws can be fought with drives to make Voter IDs available to everyone eligible to vote. What I am afraid of is that these clever ploys will be replaced by more desperate means that will lead to open conflict.

2/3/14, 2:37 PM


Is that you Ben Emery?

Laguna Beach Fogey said...

Deja vu all over again. This is going to be fun.

Give it a few years. Save your money, keep your powder dry. And get ready to pounce when home prices take another dive into the dirt.

rightsaidfred said...

she believes the conventional market ought to be making lower-down-payment loans more widely available.

So, according to her, lenders are leaving money on the table. Well, there are banks for sale every day. She could buy/start one and vacuum all these proceeds.

2Degrees said...

Who are the missing mortgages going to? NZ used to be 90% white, 10% Maori. Then it acquired PI's, then East Asians. Now it has miscellaneous and they are huge in number and cover a multitude of sins, sin being the operative word.

Surely the US cannot be 23% miscellaneous.

Anonymous said...

"We don't need healthcare reform because they do not have a problem with the healthcare system:" - our healthcare problem isn't a "healthcare problem" at all, its a "wages have stagnated for half a century" problem.

"What I am afraid of is that these clever ploys will be replaced by more desperate means that will lead to open conflict." - The end result of demographic shift is conflict, maybe you should just not do that if you don't want conflict.

Gringo said...

Anonymous/No tiene nombre @2/3/14, 2:37 PM What evidence is there of voter fraud?

For starters:

State Sen. Roderick Wright found guilty of perjury, voter fraud.

Other than These Two Big Cases in Texas and New York, Election Fraud Doesn’t Exist.

More and more fraud.

If you do not seek, you shall not find. So put your hands over your ears and start yelling, "THERE IS NO SUCH THING AS VOTER FRAUD." Should make you feel better.

Anonymous said...

What does Julia Gordon at CAP mean when she says banks need to 'make conventional loans more widely available'? My understanding is that lots of banks offer non-FHA loans with lower down payments - except that you have to have A GOOD CREDIT SCORE. Low down payment and poor credit score means an FHA, on which the PMI costs just went through the roof. Used to be you only needed PMI on an FHA loan until you had 20% equity. Now they require it for the life of the loan.

Basically this leftist wants banks to recreate the exact same situation we just suffered through: cheap money for dumbasses who have proven they won't repay their loans. Writing as one who paid down a shitload of debt rather than take the easy way out and declare bankruptcy, I have no sympathy for these imbeciles. They've screwed up our lives enough, thank you.

David said...

Lately I see ads and hear talk, all whooping up house-flipping again.

Any old bubble will do.

Bubbles at home and wars abroad (just wait). Bush! Thou shouldst be decider at this hour!

Nah, Barry will do. They have the same paymasters, and are cut from the same cloth.

Anonymous said...

100 - 69 - 3 - 5 = 23% of new conventional mortgages going to whom?


Those guys?

Anonymous said...

The lady from the Center for American Progress - a group funded by a long list of major American corporations (GE, WalMart, Goldman Sachs, ad nauseum) as well as George Soros, Peter Lewis, Steven Bing, and the Sandlers (who sold their poison pill of a rotten financial company to Wachovia just in time for the financial collapse) - presents a classic case of how the filthy rich and the filthy poor work to attack the middle.

Easy credit for home loans leads to rapid inflation in market for lower-end homes. The rich aren't affected by this all that much, the poor get to live cheaply using loans they'll never pay off, and the owners and CEOs of real estate companies and financial companies make bank.

The middle class - the ones with decent credit and responsible savings habits who could easily have gotten loans anyway? They get to watch as the price of homes goes through the roof, and get stuck having to make the hard call of continuing to pay on their underwater mortgage or walking away.

This is exactly the kind of situation the robber barons who finance CAP want to create - a situation that moves more money into the pockets of the rich and permanently weakens the middle class.

Anonymous said...

I have some sympathy for minorities who find it difficult to save any money.

It would be hard for you to save, too, if you grew up in a culture where almost nobody saves, and if anyone does try to save they are treated as some cross between Scrooge and a piggy-bank for your deadbeat relatives.

David said...

>I have some sympathy for minorities who find it difficult to save any money<

I have more sympathy for the people who have to bail them out, including by suffering the near-collapse of the economic system.

ogunsiron said...

Anonymous Anonymous said...
"100 - 69 - 3 - 5 = 23% of new conventional mortgages going to whom?"

Asians, I suppose. You know, the minority group that does not get name-dropped a lot in liberal circles, because they don't fit the narrative.
====
Asian-americans are a history of bravery and love and suffering so much under the label of "model minority"!
- Amy Suzuki, doctoral student in asian american studies, too dumb to get into grad school in statistics or med school, working on a thesis entitled "colonial representations of yellow bodies : the rapey myth of the Nanking so-called massacre and how it problematizes asian-american unity"

Luke Lea said...

Not bad, you could have been a poet, Steve.

sunbeam said...

David wrote:

"Lately I see ads and hear talk, all whooping up house-flipping again."

Is this a regional thing? Because the market for houses looks as dead as anytime since 08.

Anonymous said...

"100 - 69 - 3 - 5 = 23% of new conventional mortgages going to whom?"

The so-called Native Americans. Because they are part Paleolithic hunter-gatherers and almost as good as whites.

Hunsdon said...

Anonydroid at 2:37 PM said: In the end it is all about power: racism, class warfare -- you name it. Those with power and most of the wealth want to keep it, and they will do anything to maintain the status quo.

Hunsdon asked: So are you Anti-Racist at GLP?

http://glpiggy.net/2014/02/03/links-184/#comment-84142

Anonymous said...

Auster would have loved this.

Oswald Spengler said...

Anonymous said...

"Auster would have loved this."

2/3/14, 10:03 PM

------------------------------------

It is their country now, after all.

Winnie said...

Did poor Blacks seek help from this guy?

Simon in London said...

If this were about people behaving better - 'acting white' I guess - shouldn't NAMs be encouraged to save more, rather than take out near-zero-down-payment loans?

But it's not about getting people to behave better, is it. It's about helping them fulfil their 'dreams'.

Oswald Spengler said...

"But it's not about getting people to behave better, is it. It's about helping them fulfil their 'dreams'."

------------------------------------

Some dreams should be crushed.

Anonymous said...

There's a very simple way to determine whether lending institutions discrimnate against a given group: Determine whether that group has higher or lower default rates than the general population , controlling for loan characteristics such as interest rate and required down payment. If a group has a lower default rate that the general population they are experiencing discrimination. if their default rate is higher they are actually being treated better than the general population.

Those who claim discrimination have scrupulously avoided using this truly rigorous method of proving discrimination. I suspect that this is not because of the difficulty of doing such a study, which is hardly greater than the effort required for the far less convincing research they actually produce. Rather, I suspect that these advocates are convinced in their heart of hearts they would find what everyone already suspects: Default rates for the PC minorities are actually higher than those for Whites and Asians.

Anony Mouse said...

My husband and I are starting to investigate buying a co-op on NYC. We have a 20% down payment, are pre qualified for a mortgage, looking to borrow our annual income and no more, and the mortgage plus common charges will be about 25% of our take home.

And we're still likely to have to wait another year because we haven't held our respective jobs long enough to satisfy the coop board. If they're not willing to consider people like us, then NAMs must almost never get in.

Oddly, nobody seems to be doing anything to rectify this disparity, perhaps because so many of our overlords live in NYC co-op buildings themselves.

PurityofEssence said...

Never in the field of human debt peonage was so much owed by so many to so few. All hearts go out to the mortgage brokers, whose brilliant actions we see with our own eyes day after day; but we must never forget that all the time, stripclub night after stripclub night, quarter after quarter, our investment bankers travel far into Asia, find their targets in the institutions and pensions by the highest banksterist skill, aim their pitches, often under the least disinterested circumstances, often with serious expense accounts, while avoiding even the most sensible discrimination, and inflict shattering blows upon the whole of the financial and interest-bearing structure of the Sino-Japanese power

Frank Montgomery said...

Damned if you do, damned if you don't. Give a NAM a mortgage, you're a racist predatory lender, pay $10b to DOJ. Don't give a NAM a mortage, you're a racist using hatefacts, check your privilege and pay $10b to DOJ.

Anonymous said...

There's a lot of disparate impact in the number of media attacks on white people.

James K said...

How quickly we forget. The subprime mortgage scandal, the global credit crunch, and our continuing financial problems, had their origin in Clinton-era affirmative action policies. Fannie Mae and Freddie Mac were not giving mortgages to poor people, and this was having a disparate impact on minorities. So they were given targets for lending - not to minorities, but to poor people. The rest is history.

"In 1996, the department of Housing and Urban Development gave Fannie and Freddie an explicit target: 12 percent of their mortgage financing had to go to borrowers with incomes less than 60 percent of their area’s median income,” reports Anna J. Schwartz at the National Bureau of Economic Research. “That number was increased to 20 percent in 2000 and 22 percent in 2005. The 2008 goal was to be 28 percent. Between 2000 and 2005, Freddie and Fannie met those goals every year."

From Socialism's Fatal Conceit by Ralph R. Reiland.