She said “half” the Hispanic mortgages were sub-prime and “a quarter” of those are in default.
My wife mentioned last night she remembers Bush in New Mexico raving about the immigrants owning homes.
I’m in the biz and I can tell you that for about 2 years if you were breathing you could get a loan. Until last November you could still get a loan if your back ratio was not over 50% and credit score didn’t matter. Until this month you could get a loan on the same terms but your score had to be 580. And this was all with no money down. Those programs end this month.
I think it’s interesting that when those no money down FHA loans go away we all of a sudden have a crisis.
I also remember being a loan officer in the early 90’s and we were all scared to death of rejecting a minority loan.
A need for downpayment assistance, which affects minority families to a greater extent than non-Hispanic whites because they have less accumulated wealth that can be used to help children with downpayments;
A lack of access to affordable mortgage credit;
A lack of understanding of the homebuying process;
Weak credit histories, often arising from a poor understanding of financial matters and where financial counseling is required;
A lack of information about available homeownership programs in the community; and
Language difficulties or cultural differences.
This is all found withing the "Home of Your Own" Policy
Link:http://www.whitehouse.gov/infocus/homeownership/homeownership-policy-book-whole.pdf
This is related to what I was telling my husband one of the reasons why I blamed the govt for the crisis. Between govt demanding that the banks do their BEST to get low income families in homes and the creation of Freddie and Fannie (subsidized by the govt) to ensure that this happened, we have families who would not otherwise been able to afford homes realizing too late that they really CANNOT afford to own.
The lenders are the others to blame. They would not work with borrowers to ensure the people could stay in their homes. I know a few people who tried working with the lender but kept being told that they had to wait three months before anything could be done..only to be told it was now in foreclosure. Or the lender sent a payment back because borrower was still one month behind. There is no reason on God's green earth why a lender couldn't allow a person to pay a smaller payment for a short period of time until their income picked up. The lender still gets their money cause interest is accrued on the unpaid balance. To me - that is the real cause of the housing crisis!!!!
I worked in loans and RE in the late 60’s/early 70’s. Regarding new loans for purchase, there were only really three types of loans we dealt with, FHA, VA and Conventional, and the latter were 20% down, 10 + 10 in less common cases. For her income to be considered, the wife had to prove she was either done having kids or couldn’t have kids or was on birth control (note from Dr., imagine that today!). If a loan officer made a bad loan and the lender had to foreclose, despite all the checks and balances, the loan person might find himself tending the property until it sold; lenders did not wish REO property on their record. The loans made in recent years are what we would have called “Mickey Mouse” loans, and it’s no surprise how it all turned out.