The article reports:
I have written frequently that I estimate that one-third of the mortgage foreclosures in the 2007-10 period were of Hispanic homebuyers. Very many had been granted mortgages, despite bad or dubious credit, by lenders who then fobbed them off on Fannie Mae and Freddie Mac or other mortgage securitizers, in the meantime gaining brownie points with regulators for lending to “minorities.” Evidence supporting this comes, inadvertently, from an Urban Institute report spotlighted by the industrious and provocative blogger Steve Sailer. You can see that there was a huge increase in the number of mortgages granted to Hispanics in the years running up to 2006, when housing prices peaked, centered in metro Los Angeles and the adjacent Inland Empire to the east, in California’s Central Valley and in metro Las Vegas and Phoenix. Not coincidentally, these “sand states” (plus Florida) accounted for more than half of mortgage foreclosures when housing prices plummeted and buyers who suddenly found themselves underwater and/or out of work defaulted on their mortgages.
Both President Bush and President Clinton encouraged home buying for Hispanic buyers, which resulted in many of the previous income/mortgage ratio standards for granting mortgages being ignored. This resulted in the housing bubble, the crash that followed, and a tremendous amount of money spent in attempting to avoid disaster.
Well, the government has not learned its lesson. The article reports:
Now the Urban Institute and the Obama administration are pushing for more mortgages for blacks and Hispanics with subpar credit ratings. Haven’t America, the world and the intended beneficiaries already suffered enough from this perhaps well-intentioned but indubitably misguided policy?
How many times do we have to do this before we learn that it is not a good idea to lend large sums of money to people who cannot pay it back?