Posted on 02/21/2009 8:07:44 AM PST by IbJensen
Open most any urban newspaper to the foreclosure notices, and you'll find the list heavy with Hispanic names. Times are tough for Americans of every demographic, but for Latinos they are grimmer still.
Is this the end of the Latino-American Dream? The answer, in Spanish, is No.
President Barack Obama has just unveiled a $75 billion plan that includes helping homeowners who are behind in their monthly payments but could keep up if their mortgage terms were eased a bit. Many Latinos would fit this category.
Almost one in 10 Latino homeowners reported missing a mortgage payment -- or being unable to make a full one -- in 2008, according to a Pew Hispanic Center survey. Over a third said they feared their own home might go into foreclosure. For foreign-born Latinos, that number rose to 53 percent. (Pew doesn't ask about immigration status.)
Many Latinos bought or refinanced homes at the worst possible time -- just before the housing bubble went splat. Lots of people fell for the pitch that real-estate was an up-only escalator into the American Dream. But with more than half of Latino families still renting their homes, they became a very juicy target for the builders, brokers, loan originators and banks seeking to prosper off mortgage mania.
As with other fans of easy credit, many Latinos were reckless in their borrowing. Some lied about income on their loan applications, often egged on by brokers and mortgage companies. But more were simply clueless. Mortgage companies wrote contracts designed to confuse even the most fluent speakers of English. Those with limited English were especially hard-pressed to understand the terms.
Subprime mortgages were invented for borrowers with poor credit ratings. They come with higher interest rates and often-punishing fees to supposedly compensate lenders for the added risk.
But the road to riches was to make the deal, collect the fees, then palm the dodgy loans onto other investors. Wall Street took its cut packaging the mortgages into securities.
For an unscrupulous lender, the ultimate win-win is convincing a good credit risk that he or she isn't one -- and can only qualify for an expensive subprime mortgage. Subprime lenders found minority neighborhoods fertile ground for playing this trick. For example, 40 percent of African Americans who took out subprime mortgages would have qualified for more-affordable mainstream loans.
The subprime craze crested in 2005. That year, less-than-prime mortgages sold to Hispanics jumped 169 percent. (They rose 110 percent for whites and 122 percent for blacks.)
Further lowering the guard of Hispanic home-buyers were the strong efforts of their so-called allies -- low-income housing groups and Latino lawmakers -- to herd them into the tent. The Hispanic Congressional Caucus Institute's Hogar (''hearth'' in Spanish) initiative was funded by the subprime industry. Subprime executives served as advisors.
Rep. Joe Baca, D-Calif., pushed for lower lending standards as a way, he said, to ''open the door to the American Dream.'' Brokers hawking the most toxic subprime products rushed into his 58-percent Hispanic San Bernardino district, now one of America's foreclosure capitals.
The question must be asked: How many people now facing the loss of their homes would be OK had been given the easier terms of a prime mortgage? The Obama Homeowner Affordability and Stability Plan may provide part of the answer.
Things will calm down. The United States will recover from the economic crisis. Debt-burdened families will restore sanity to their personal finances. (They've already begun.) Meanwhile, lower realestate values could help some who lost their home get back in the homeownership game. For the many Latinos among them, the American Dream is not dead; it just has been put on hold.
I lump them all together as “lenders”. They were all in on the scheme and Freddie and Fannie were both faciliators, incentivisors, and guarantors of the banks and mortgage lenders.
They all knew deep down that the scheme was unworkable, but they thought they could pass the paper around and move the problem into the distant future long after they made their big profits.
Because their target was the huge illegal alien community, they knew that they would get a lot of sympathetic support from the Democrats (votes) and the open borders Republicans (cheap labor) and a lot of government backup and encouragement. Even now the papers and TV are loaded with sympathetic stories about these people getting kicked out of the homes they shouldn’t have been in in the first place. And, like the story here, won’t ever state the illegal status of the evictees.
This fact will be kept suppressed because later this year the Democrats along with McCain and the Chamber of Commerce will be pushing a new amnesty plan, and God forbid that the American public learn that the current financial mess that is now affecting/ruining their lives is traceable to the illegal alien influx.
My own take is Hispanics were cajoled and lied to be their own Hispanic mortgage brokers. Blame them
Of course these sub prime mortgages were hustled over to white boys on Wall St to bundle up as CMOs and to bet on via credit default swaps
Clinton helped it along by forcing Freddy and Fanny (and thus other lenders that sold the loans to the former) to continue to make bad loans.
Even in the past few years conservative politicians warned lawmakers that this was going to be a huge problem, but with Barney Frank making the rules nothing could be done about it. He and his friends made billions off of these underhanded tactics that are now costing us taxpayers billions.
It's exactly these practices that added a word to my description of Illegal Alien Insurgent Invading Criminal Colonists.
This housing scheme is one of the methods that Mexico is using to get firmly ensconced into out country.
Why didn’t this bunch have any dreams of making their home countries better? Why infest the USA with their barrios?
It is true that there were a lot of enabling actors dating back to the 1970;s, and not just in the financial side of the house. The apathy of the government on immigration enforcement was also a component.
All of those actions - Clinton, Carter, Barney Frank, immigration amnesties and lack of enforcement, Bush/Rove/McCain open borders attempts - were just setting up the conditions for what has happened.
It was not until the illegal flood occurred that the subsequent bad activities could take place. All of the previous setups were waiting for some event/market to take advantage of it. Illegal aliens were the seed that became available to plant in these fertile but unused fields.
The derivative paper schemes, the easy loans, the excess money supply, all came together when the illegal Hispanic house hunters showed up.
And they all cleaned up, moved on, and left us with the cleanup. The final irony is that we the taxpayers are going to be asked to pay to keep these illegals in their foreclosed homes.
The banks are still at fault here. It would have been trivially easy for them to verify borrowers' income. I know with my mortgage my bank wanted to see W2s and they even had a little chat with my employer's HR department to verify my employment.
The "affordable housing" policy and sub-prime mortgages were originally designed to benefit blacks. The Congressional Black Caucus was the driving force behind the policy. And, indeed, blacks were the primary beneficiaries of the the program well before the illegals became a market.
Toward the end, whites also became beneficiaries, as well, when many discovered they could "afford" more house than they'd planned.
It was Freddie Mac and Fannie Mae's policies that drove the housing bubble -- the result of a political policy that distorted the market and corrupted everybody associated with it.
Illegals are a separate issue. They were among those benefitting, to be sure. But the corruption was well underway without them.
Wouldn’t, couldn’t have happened without the illegals.
Blacks were a relatively static population. It was the sudden appearance of 20-40 million illegal aliens that created a huge demand for new housing capacity.
If you map the subprime foreclosures from 2006 on, you see a near perfect correlation of foreclosures and the settlement spots of illegal aliens. This Miami herald article further demonstrates it. The ZIP codes for foreclosure hotspots are also where illegals abound.
Subprimes to inner city blacks, house flippers, and McMansion squatters are an insignificant part of the foreclosure problem.
Foreclosures are now threatening the demographics outside the illegal ZIP codes because the home values of other neighborhoods have depreciated because the assessed values have gone under water. But that’s an effect, not a cause.
Millions of subprimes to illegal aliens are the cause of the current economic failure. They are the proximate cause. Everything else was just the setup.
One of the key principals of Marxist economic theory is "dialectical materialism." The liberal mindset sees this as the belief that you can break everything down into its simplest components and them analyze each one independently of the others. The problem with this is that it completely ignores (and denies) dynamic systems. It's the belief that systems operate in a vacuum. That when you change one component in a system that it will have no effect elsewhere...
One of the things claimed by leftists was that by relaxing the load standards, as this one supported, you would have more loans made, and provide more affordable housing for more people. Well, he was certainly correct on one of those points: More loans WERE made. But the belief that it would allow for more affordable housing was flawed. That completely ignores the rule of scarcity in economics. By increasing the potential number of mortgages for the available home market, you're practically guaranteeing that the price on the homes will go up. So the CRA and relaxing of standards actually helped cause and continue the "housing bubble." Of course, the lenders were knowingly making "bad loans" so they charged higher fees and interest rates, and then demanded protection from the government, through Freddie and Fannie, and they got it, since the government was forcing the issue to begin with. So more and more lenders got involved in these bad loans. And as the housing market took off, more and more builders got involved. So the housing starts increased, and more and more people got involved in "flipping" houses as well. The "housing bubble" just kept growing, and home prices got higher and higher.
And dem lawmakers wonder why a shack in southern CA was selling for $800,000... And they're the ones who caused it to begin with.
Mark
In America
Please correct me if I'm wrong, but I believe that it's not possible for a foreigner to own property in Mexico, and it's illegal for a non-natural born Mexican citizen to participate in politics, including protests.
Just an observation, but if it's good enough for Mexico, then if should be good enough for Mexicans illegally in the USA.
Mark
This is what Rand referred to as the "Consent of the Victim."
Eric Holder may have opened a can of worms he didn't mean to... His accusation that we're a "nation of cowards" on race issues. That may just backfire on him, because he's right in some respects. The vast majority of people in the US are decent and hard working, but we've allowed the race baiters to "cow" us with their PC language and threats. Well, if we were to simply stop putting up with their crap, and say to their faces that they have no power over us, then things would change quite quickly. All it takes is a bit of courage.
Mark
It's the belief that systems operate in a vacuum
I meant to write:
It's the belief that components of a system operate in a vacuum
Mark
The true, died-in-the-wool marxists in our nation are no doubt less than 1-2%; however, that's just enough in influential media and teaching positions to convince the empty skulls that voting for someone like Obomba will save the nation.
As the truth becomes known, and it won't take much longer, these fools who pulled his lever (in a nice way, that is) will never admit having voted for him, but their action has turned this nation over to the forces of evil.
Obomba proved how much he loves his 'adopted' country when he crawled through the sewers and landfills of America in order to assemble his cabinet.
Make no mistake: this entire mess can be laid at the foot of the majority of congress who march to the tune of a different drummer. (And he isn't playing Yankee Doodle!)
This 'crisis and catastrophe' as the newly elected communist president of the USA continually refers to the leftist-caused mess, will transform our nation into a Marxist mess.
I never cared for this pencil-necked, pasty-faced geek. I've always believed the leftists who are now running this nation into the swamp have something juicy on this Republicrat.
Sí. The writer was being funny, or trying to. See?
Ping!
They must mean the ALT-A dream loan, which was a key ingredient in the mortgage bank meltdown and a major reason for the knee jerk bailout to occur in the first place.
Yep, they even had their own strategeria: Hispanic National Mortgage Association
Of course these sub prime mortgages were hustled over to white boys on Wall St to bundle up as CMOs and to bet on via credit default swaps
Absolutely correct. Why look, there's one of those white boys now...McCain's very own campaign manager and heavy duty sub-prime loan lobbyist:
-I looked at your links
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