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Diversity and the Housing Bubble/Bust: Yet More Data
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I like to collect academic studies documenting the interaction of America’s love affair with Diversity and Immigration with the Housing Bubble/Bust of the 2000s. From the The Annals of the American Academy of Political and Social Science, July 2015:

Variations in Housing Foreclosures by Race and Place, 2005–2012

Matthew Hall
Kyle Crowder
Amy Spring

Abstract

This study describes the spatial and racial variations in housing foreclosure during the recent housing crisis. Using data on the 9.5 million visible foreclosures (public auctions and bank repossessions) occurring between 2005 and 2012, we show that the timing and depth of the foreclosure crisis differed considerably across regions and metropolitan areas, with those located in the Mountain and Pacific West regions experiencing the highest foreclosure risks. The crisis was patterned sharply along racial/ethnic lines, with metros and neighborhoods with large black and Latino populations—as well as racially mixed neighborhoods—having high rates of foreclosure. Our analysis also highlights the particular vulnerability of Latino households, who not only had very high individual risk of foreclosures but tended to reside in areas hit hardest by the crisis. The race-stratified geographic patterns of foreclosure revealed here are substantially more complicated than a narrative that depicts only the unique disadvantage of black households during the crisis, and likely reflect some level of specific targeting of minority populations and neighborhoods by predatory and subprime lenders.

I haven’t been able to find a copy of this for less than $30, so I haven’t read more than the abstract, but it appears to fit in closely with virtually every detailed study published in the last half year, along with my arguments in 2007-2008.

But what percentage, say, of 2016 Presidential candidates are aware of this connection?

Update: thanks to readers, here are some quotes from the paper:

The popular story of the crisis often includes narratives of foreclosures in white western suburbs (Economist 2011) and minority-heavy central cities in the Midwest (Haughney and Roberts 2009). … while black concentrations were mostly unrelated to average foreclosure rates in cities and suburbs, they were strongly conditioned by Hispanic shares. In both cities and suburbs, foreclosure rates were considerably higher in areas with larger Hispanic populations, with the highest rates being observed in suburban areas that were more than one-fifth Hispanic. …

Average foreclosure rates, however, varied sub- stantially by neighborhood racial composition. In all-white and Asian neighbor- hoods, there were fewer than 5 foreclosures for every 100 homes, and just 1 in 8 of such neighborhoods had foreclosure rates over 10 (“very high”). by contrast, mostly black and mostly Hispanic neighborhoods had foreclosures over 12.9 and 11.4, respectively, and nearly half of these neighborhoods had very high rates. For the most part, most neighborhood types, including a mix of whites and minority groups, fell somewhere between all-white and all-minority neighbor- hoods. the exceptions are Hispanic-white and integrated neighborhoods, which experienced especially high rates of foreclosure (14.0 and 15.1) and were very likely to fall in the “high” or “very high” foreclosure classification. …

Thus, despite media accounts of the crisis primarily targeting suburban white and urban minority neighborhoods, the descriptive patterns in table 3 sug- gest that white neighborhoods were mostly shielded from the worst of the fore- closure crisis, while black, racially mixed, and especially Hispanic neighborhoods were hit especially hard.3

Specifically, in all divisions, the lowest average foreclosure rates are observed in all-white or Asian neighbor- hoods. by contrast, racially mixed and solidly minority neighborhoods—e.g., mostly black and all-minority areas—consistently recorded some of the highest rates. Foreclosure rates among black-white and white-mixed neighborhoods in the Mountain division were in excess of one in four homes over the 2005 to 2012 period. the highest average rates were observed in Southern Atlantic integrated neighborhoods where one foreclosure for every three homes was logged. In all but one division where there were a sufficient number of block groups, mostly black neighborhoods had the highest or second-highest average foreclosure rate, followed by black-white neighborhoods, which ranked second-highest in four divisions. Mostly Hispanic and Hispanic-white neighborhoods also recorded exceptionally high rates of foreclosure in several divisions, including the Mountain west and South. A central point to take away from this analysis is that in each region, neighborhoods containing sizable shares of African American and Latino populations tended to be the most heavily burdened by foreclosures in almost every division of the country.

Basically, this 2015 statistical analysis comes up with a picture of the Bubble/Bust that looks an awful lot like the one I depicted in my 2008 short story “Unreal Estate” about two white brothers-in-law speculating on houses in the high desert exurbs of north Los Angeles County: the big losses tended to be in integrated neighborhoods where people were trying to buy their way out of diversity-related problems elsewhere. It turned out, though, as Buckaroo Banzai liked to say, “Wherever you go, there you are.”

 
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  1. Four options for academic journal articles not free online:

    1. Polite email to the author. Most are flattered you are interested.

    2. Ask your son to download from a computer in his college library. Any campus dorm connection typically works too. Or just do it yourself next time you drive by a college.

    3. Have a college student or employee set up a proxy using their school ID on your computer. They don’t have to even give you their password, it can be saved in the browser without showing it.

    4. Draft versions of a lot of articles are online at SSRN.

    • Replies: @jay-w
    @Lot


    1. Polite email to the author. Most are flattered you are interested.
     
    If it's Steve Sailer emailing a lefty academic, he might want to use a pseudonym.
    , @Kylie
    @Lot

    Thank you very much!

    , @Harold
    @Lot

    Also check out https://www.reddit.com/r/scholar

    , @theo the kraut
    @Lot

    overall correct, but re no 3: in any modern browser it takes only a few clicks to get the stored password if you're tech savvy enough.

  2. here

    I think this is a very old draft.

  3. I would have a hard time believing there could be any candidate who isn’t aware of this, or they have staffers who are. These are not dumb people, just misguided and corrupt. They know that in 2015, politics requires that you repeat all the approved pieties and platitudes, even if they realize how stupid it makes them sound.

  4. Predatory lending? Is that because the purchasers were easy marks, or because the entire mortgage industry is made up of evil, evil racists?

    • Replies: @Steve Sailer
    @Polynikes

    Or because the mortgage industry recruited a lot of Hispanic agents?

  5. @Lot
    Four options for academic journal articles not free online:

    1. Polite email to the author. Most are flattered you are interested.

    2. Ask your son to download from a computer in his college library. Any campus dorm connection typically works too. Or just do it yourself next time you drive by a college.

    3. Have a college student or employee set up a proxy using their school ID on your computer. They don't have to even give you their password, it can be saved in the browser without showing it.

    4. Draft versions of a lot of articles are online at SSRN.

    Replies: @jay-w, @Kylie, @Harold, @theo the kraut

    1. Polite email to the author. Most are flattered you are interested.

    If it’s Steve Sailer emailing a lefty academic, he might want to use a pseudonym.

  6. • Replies: @Steve Sailer
    @Harold

    Thanks.

    , @E. Harding
    @Harold

    How do you embed imgur frames into comments?

    Replies: @Harold

    , @jJay
    @Harold

    There's no 'All-Asian' group in those tables. This might be because a home seller in a town like Arcadia or Temple City, CA has nothing but full cash offers today that are worth considering. This won't show up in the data. Just an observation. My wife (Chinese) and I shopped there about 5 years ago and realized we were out of our league even with 70% down.

    Replies: @Twinkie

  7. If ACORN were sending agents out into poor neighborhoods, knocking on doors, and asking the poor hispanic or black occupants if they’d ever considered buying a home, then sat them down and showed them step by step of how to secure a mortgage loan with the shitty job and credit score they had, would that be considered “predatory”?

    I thought “community organizers” couldn’t be considered predatory. If they were predatory, that means something was horribly wrong with community organizing, and their leaders should be held accountable, shouldn’t it?

  8. Let’s assume all the candidates are briefed about these statistics. In Obama’s America, the Democrat candidates would argue over who would try to provide the most race-based subsidies for homeownership. It would probably end in Sanders saying he would offer 100% mortgage subsidies up to one million dollahs.

    Republican responses seem harder to predict.

  9. @Harold
    http://imgur.com/a/XXykD

    Replies: @Steve Sailer, @E. Harding, @jJay

    Thanks.

  10. @Polynikes
    Predatory lending? Is that because the purchasers were easy marks, or because the entire mortgage industry is made up of evil, evil racists?

    Replies: @Steve Sailer

    Or because the mortgage industry recruited a lot of Hispanic agents?

  11. So, after 15 years of pushing loans to minorities as part of a national effort supported by academics, government, non-government agencies, community/minority activists, the hindsight is this was actually ‘predatory lending.’ As if giving someone a free house they paid nothing to rent for a couple years is that horrible.

    Anyone given something they don’t deserve, and told they deserved it, will be worse off for it.

  12. @Harold
    http://imgur.com/a/XXykD

    Replies: @Steve Sailer, @E. Harding, @jJay

    How do you embed imgur frames into comments?

    • Replies: @Harold
    @E. Harding

    Just include an imgur link and it happens automatically.

  13. @Harold
    http://imgur.com/a/XXykD

    Replies: @Steve Sailer, @E. Harding, @jJay

    There’s no ‘All-Asian’ group in those tables. This might be because a home seller in a town like Arcadia or Temple City, CA has nothing but full cash offers today that are worth considering. This won’t show up in the data. Just an observation. My wife (Chinese) and I shopped there about 5 years ago and realized we were out of our league even with 70% down.

    • Replies: @Twinkie
    @jJay


    There’s no ‘All-Asian’ group in those tables.
     
    If you were referring to Table 3, the reason is probably that "all-Asian" neighborhoods are virtually non-existent. Asians tend to have the highest rate of residing with non-co-ethnics among all the major ethno-racial groups. To put crudely and concisely, they like living with white people (and certain kinds of white people at that - those who are educated and affluent).

    "Asian-white" neighborhoods have the lowest foreclosure rate (4.31; all white 4.89). These are probably the most likely to be Murray's super zip codes. What was surprising for me was that "Hispanic-white" neighborhoods (14.00) had a higher foreclosure rate than mostly Hispanic (11.42) or mostly black neighborhoods (12.92; only outdone by "Integrated" neighborhoods, 15.14, whatever that means). Apparently, the whites who live next to or intermarry Hispanics are at the bottom of the pile, foreclosure-wise and probably in other socio-economic measurements.

    Replies: @Steve Sailer, @ren

  14. Here are the last two paragraphs of the conclusion:

    The racial and ethnic stratification revealed here likely reflects, at least in part, the specific targeting of minority populations and neighborhoods by predatory and subprime lenders, and it has potentially profound implications for broader patterns of racial inequality. We know, for example, that personal experiences of foreclosure typically entail significant loss of wealth-building capacity, and often precipitate residential mobility, family instability, and stress, all with important repercussions for health. And those living in high-foreclosure neighborhoods, regardless of their own housing situation, face the prospect of declining property values, rising crime, and growing disorganization in their neighborhood. Thus, by disproportionately impacting minority individuals and communities of color, the foreclosure crisis has likely affected substantial changes to racial disparities in well-being along a variety of dimensions. The downstream impacts of these effects are likely to unfold slowly, potentially reshaping patterns of racial stratifications for decades.

    By delineating these racially stratified patterns, the research presented here highlights the importance of several key areas for policy intervention. First, it is clear that programs aimed at preventing individual foreclosures should be aggressively targeted to and—given evidence that the efficacy of policy interventions vary by race (Collins, Schmeiser, and Urban 2013)—explicitly designed for Latino and black homeowners. In a similar way, efforts to mollify the effects of concentrated foreclosure on local housing values, vacancy rates, crime, and population instability should be focused on neighborhoods of color—places at a vulnerable position in the geography of disadvantage even in the best economic times (Peterson and Krivo 2010; Sampson 2012). Finally, the extreme racial disparities documented here underscore the importance of identifying and redressing the underlying processes of stratification and discrimination—including those demonstrated by predatory lenders—that precipitated the crisis and its uneven impacts.

  15. @E. Harding
    @Harold

    How do you embed imgur frames into comments?

    Replies: @Harold

    Just include an imgur link and it happens automatically.

  16. “Arguably more striking than the racial differences in the interval rates are the
    cumulative rates summarized in the lower portion of Table 5. The cumulative
    numbers underscore the enormity of the crisis as well as the substantial racial
    variation is foreclosure risk. By 2013, about one in thirteen whites had experienced
    a foreclosure start, more than one in six black homeowners did, and nearly
    one in four Hispanic homeowners had gone through a foreclosure”

    This might be a key graph. If you multiply foreclosure rates by race by share of population by race, you can estimate the fraction of foreclosures by race. For example, if 65% of US people are white and 1/13 whites had a foreclosure, than approximately 5% of US households were whites who had a foreclosure. About 2% of US households were blacks who had a foreclosure and about 4.3% of households were Hispanics who had a foreclosure. Approximately 44% of foreclosures were of white households, about 18% were blacks and about 39% were Hispanics.

    So its probably fair to say that the foreclosure crisis was a minority-majority phenomenon, but beyond that it could be more difficult to say.

  17. I lend my own money to people and I have to say that overall I would rather lend to Hispanics than Whites. The default rate is higher with Hispanics but they usually try and it tends to be an actual income problem in the household when they stop paying. Whites are incredibly whiny and think they are clever when it comes to default time.
    African Americans are horrible to lend to – with the odd exception where the person is a dream customer. Hispanics with African American partners almost always fit into the AA mold of behavior.
    Not sure why I keep replying to these lending threads because no one cares what actually happens in the real world…

  18. Btw, I didn’t email Sailer a copy of the paper, I would prefer someone else do that.

  19. When was the last time somebody walked into a bank to get a home loan? Money is a commodity and it is peddled by brokers who sell loans to people who look, talk, and act like themselves and receive a commission. Every time the media uses the word “bank” I think of a granite building with columns and a vault. Inside is a white guy in a grey suite with white pinstripes and a pocket handkerchief.

    Speaking of banker jokes, has anyone ever heard of the 10, 4, 2 rule?

  20. I admire Steve Sailer’s ability to see the stories others miss, but I confess I never entirely understood the diversity/housing bust story. That doesn’t mean I dismiss it. I just don’t get it. I’m wondering–and hoping someone here can enlighten me–about why can we blame “diversity” for the bust when:
    1) bubbles happen all over the world to all sorts of populations, including that of Japan
    2) lenders need zero encouragement to lend when they’re sure an asset class can’t fall in price (i.e. banks were eager to make these home loans, not reluctant)
    3) the (unwise) effort to encourage homeownership was made in order to give poor Americans of all races, not just black or brown, a piece of the dream
    4) the rates of default among black and brown mortgage holders was especially high presumably because the rate of poverty among AAs and Latinos is disproportionately high (i.e. it’s a poverty bust, not a diversity bust) and
    5) lots of lenders were telling borrowers they’d be excellent candidates while knowing full well that these people couldn’t pay (i.e. old-fashioned fraud directed at all low-income borrowers, not just non-white ones).

    What am I missing?

    • Replies: @Neuday
    @SEATAF

    Government coercion

    Replies: @SEATAF

  21. 2) lenders need zero encouragement to lend when they’re sure an asset class can’t fall in price (i.e. banks were eager to make these home loans, not reluctant)

    I am flummoxed in a very fundamental way by something called accrual-based accounting. The other way is call cash-based accounting. In the former, an unpaid invoice or an unpaid loan is an asset. No, it isn’t.

    *I’m stamping my feet on the ground like a German*

    An unpaid invoice or loan is an unknown asset.

  22. 2) lenders need zero encouragement to lend when they’re sure an asset class can’t fall in price (i.e. banks were eager to make these home loans, not reluctant)

    I am flummoxed in a very fundamental way by something called accrual-based accounting. The other way is call cash-based accounting. In the former, an unpaid invoice or an unpaid loan is an asset. No, it isn’t.

    *I’m stamping my feet on the ground like a German*

    An unpaid invoice or loan is an unknown asset. It should be null wrt accounting. The null value is everywhere in database technology.

  23. @jJay
    @Harold

    There's no 'All-Asian' group in those tables. This might be because a home seller in a town like Arcadia or Temple City, CA has nothing but full cash offers today that are worth considering. This won't show up in the data. Just an observation. My wife (Chinese) and I shopped there about 5 years ago and realized we were out of our league even with 70% down.

    Replies: @Twinkie

    There’s no ‘All-Asian’ group in those tables.

    If you were referring to Table 3, the reason is probably that “all-Asian” neighborhoods are virtually non-existent. Asians tend to have the highest rate of residing with non-co-ethnics among all the major ethno-racial groups. To put crudely and concisely, they like living with white people (and certain kinds of white people at that – those who are educated and affluent).

    “Asian-white” neighborhoods have the lowest foreclosure rate (4.31; all white 4.89). These are probably the most likely to be Murray’s super zip codes. What was surprising for me was that “Hispanic-white” neighborhoods (14.00) had a higher foreclosure rate than mostly Hispanic (11.42) or mostly black neighborhoods (12.92; only outdone by “Integrated” neighborhoods, 15.14, whatever that means). Apparently, the whites who live next to or intermarry Hispanics are at the bottom of the pile, foreclosure-wise and probably in other socio-economic measurements.

    • Replies: @Steve Sailer
    @Twinkie

    The big money tended to be lost in new neighborhoods, like in the Inland Empire, the High Desert, Phoenix, Las Vegas, the Central Valley outside San Francisco, and western Florida where everybody was excited that all those outdated ideas about race and ethnicity were being thrown out and everybody was going to get rich living together in perfect harmony.

    All Hispanic neighborhoods, like all black neighborhoods, were a little too obviously depressing for this kind of thinking. But people figured that we could start over with a blank slate and put all that evil old redlining behind us.

    , @ren
    @Twinkie


    What was surprising for me was that “Hispanic-white” neighborhoods (14.00) had a higher foreclosure rate than mostly Hispanic (11.42) or mostly black neighborhoods (12.92; only outdone by “Integrated” neighborhoods, 15.14, whatever that means).
     
    Hispanic-white is actually more hispanic than it sounds because lots of ordinary Mexicans consider themselves white.

    My mexican relatives moved to the USA, married white guy and checked off white on the kids' birth certificates. They wanted to be white. There is still plenty of that left.
  24. @Lot
    Four options for academic journal articles not free online:

    1. Polite email to the author. Most are flattered you are interested.

    2. Ask your son to download from a computer in his college library. Any campus dorm connection typically works too. Or just do it yourself next time you drive by a college.

    3. Have a college student or employee set up a proxy using their school ID on your computer. They don't have to even give you their password, it can be saved in the browser without showing it.

    4. Draft versions of a lot of articles are online at SSRN.

    Replies: @jay-w, @Kylie, @Harold, @theo the kraut

    Thank you very much!

  25. @Lot
    Four options for academic journal articles not free online:

    1. Polite email to the author. Most are flattered you are interested.

    2. Ask your son to download from a computer in his college library. Any campus dorm connection typically works too. Or just do it yourself next time you drive by a college.

    3. Have a college student or employee set up a proxy using their school ID on your computer. They don't have to even give you their password, it can be saved in the browser without showing it.

    4. Draft versions of a lot of articles are online at SSRN.

    Replies: @jay-w, @Kylie, @Harold, @theo the kraut

  26. @Twinkie
    @jJay


    There’s no ‘All-Asian’ group in those tables.
     
    If you were referring to Table 3, the reason is probably that "all-Asian" neighborhoods are virtually non-existent. Asians tend to have the highest rate of residing with non-co-ethnics among all the major ethno-racial groups. To put crudely and concisely, they like living with white people (and certain kinds of white people at that - those who are educated and affluent).

    "Asian-white" neighborhoods have the lowest foreclosure rate (4.31; all white 4.89). These are probably the most likely to be Murray's super zip codes. What was surprising for me was that "Hispanic-white" neighborhoods (14.00) had a higher foreclosure rate than mostly Hispanic (11.42) or mostly black neighborhoods (12.92; only outdone by "Integrated" neighborhoods, 15.14, whatever that means). Apparently, the whites who live next to or intermarry Hispanics are at the bottom of the pile, foreclosure-wise and probably in other socio-economic measurements.

    Replies: @Steve Sailer, @ren

    The big money tended to be lost in new neighborhoods, like in the Inland Empire, the High Desert, Phoenix, Las Vegas, the Central Valley outside San Francisco, and western Florida where everybody was excited that all those outdated ideas about race and ethnicity were being thrown out and everybody was going to get rich living together in perfect harmony.

    All Hispanic neighborhoods, like all black neighborhoods, were a little too obviously depressing for this kind of thinking. But people figured that we could start over with a blank slate and put all that evil old redlining behind us.

  27. For all with an interest in anything remotely tied to stats, rankings, trivia or all-around municipal categorization, I humbly offer a link to the following resource:

    http://www.epodunk.com/

    If you want to get to Podunk, take the road to Bumphuq and when you get to the fork in the road, take it.

  28. Jack Hanson says:

    When I decided to be a home owner two years ago, I went through Wells Fargo for the first go round. I figured it wouldn’t be too difficult. I have a stable job in a respectable position making 70k a year or so that I had for six years at the time, credit score in the high 600s, and I was VA certified as well. Ideal candidate right?

    WF crawled up my asshole and wanted every little thing explained so that maybe they might loan me 90k to buy a little house. Throughout the entire process the loan officer would vanish for weeks at a time, only to reappear suddenly needing a ledger full of documents within the next day. It was ridiculous, and the final grace was they denied me the loan in the end as they stated it was next to an industrial zone.

    My second go round I went through a mortgage company, and moved in after 60 days. The company promptly sold mu mortgage to, guess who, WF.

    My experience leads me to believe the banks have literally zero sense of modulation. It’s either shut down the taps or let the good times roll.

  29. Same as usual. These people are evil.

    WSJ, 10/22/15 – Labor Shortages Trip Up Big Home Builders

    http://blogs.wsj.com/economics/2015/10/22/labor-shortages-trip-up-big-home-builders/

    Construction-labor shortages are starting to dent the results of large home builders. PulteGroup Inc., the third-largest U.S. builder by homes delivered, on Thursday blamed its 6% decline in finalized sales in its third quarter primarily on a dearth of workers needed to finish homes on time…

    Theories abound on why many U.S. construction workers left the industry during the downturn and haven’t returned. Some builders and contractors say the industry’s infrastructure for marketing itself to young workers and training them for construction careers needs reinvestment after being allowed to atrophy for many years. Others argue that change is needed to U.S. immigration policies to allow more foreign workers to legally work in the U.S.

    Many posit that contractors and builders need to pay tradesmen such as carpenters, masons and tile setters more to lure them back to construction…

  30. Steve, have you reviewed “99 Homes”? And if not, why not?

  31. I admire Bob’s abilities, but I confess I never really understood the Nazis and WWII thing.

    1) Wars have happened all throughout history, say, in Vietnam.

    • Replies: @SEATAF
    @Svigor

    Devastating, Svigor. Devastating...

  32. the exceptions are Hispanic-white and integrated neighborhoods, which experienced especially high rates of foreclosure (14.0 and 15.1) and were very likely to fall in the “high” or “very high” foreclosure classification.

    As this would indicate, the races don’t tell the whole story. Take a place like Palmdale, California. It had a huge number of foreclosures not because of race but because it was a last ditch place for blue collar types to buy a house – any house. In addition, the prices were well above what anybody could reasonably afford. The only thing keeping it going was low teaser rates – 5 years at 2% then a reset and continual refinancing.

    Anybody looking at the boom-bust pricing of houses out there has seen this happen repeatedly in these last chance to buy a house neighborhoods. I bought a house there 100K cash with completely custom cabinets in the garage and a swimming pool and RV parking pad. The house sold new in 1991 for 130K without all the upgrades (everything inside the house is cheap, cheap, cheap). It had a 438K mortgage in 2006. Imagine other poor slobs in blue collar jobs having that type of mortgage reset to say 8% in the middle of the recession.

    A couple of years ago I saw one for sale at 200K and it was completely redone with designer kitchen and bathrooms. There must have been 80k worth of remodel to replace the original cheap cabinets and fixtures. How much did the bank lose on that one?

    Palmdale also suffered a price collapse after the defense industries moved out of California in the late 90s, just not as steep.

    • Replies: @E. Rekshun
    @MarkinLA

    How much did the bank lose on that one?

    In 2011, I bought a bank foreclosure in FL - a single family 2000 sf home on a golf course for $70K. Bank of America had given a loan for $250K in '05; the borrower stopped making mortgage payments in '08 and continued to live in the home for three years.

    Last month, I bought a foreclosed waterfront FL condominium from Fannie Mae for $170K. The unit last sold in '05 for $250K. Fannie Mae foreclosed in Jan. 2015 for $264K. Then owner had lived in the unit for ten years and hadn't paid down any of the mortgage and, in fact, took cash out of the place!

  33. @Svigor
    I admire Bob's abilities, but I confess I never really understood the Nazis and WWII thing.

    1) Wars have happened all throughout history, say, in Vietnam.

    Replies: @SEATAF

    Devastating, Svigor. Devastating…

  34. WhatEvvs [AKA "Internet Addict"] says:

    A bit OT but related to housing (and crime). There was another cop-killing in NYC, a plain-clothes officer (black, in case you are interested) was killed in a petty dispute in a housing project by a 30-year-old career criminal, a graduate of various bullshit programs designed to keep black men out of jail because black lives matter, or something. Oh yeah, the killer wasn’t Asian….

    I wish that one day Mr. Sailer would do something about the monster known as the NYCHA – New York City Housing Authority. It’s a one-stop shop of Sailerisms: an economic black hole (no pun intended, really), a crumbling mess, a butt of jokes, a breeder of crime, intergenerational poverty, and…I’ve run out of words.

    Perhaps if/when Don Trump becomes the Republican nominee, it would be an opportune time to discuss this, because he once offered the city a good deal to buy several projects in Manhattan. But they turned him down.

  35. @SEATAF
    I admire Steve Sailer's ability to see the stories others miss, but I confess I never entirely understood the diversity/housing bust story. That doesn't mean I dismiss it. I just don't get it. I'm wondering--and hoping someone here can enlighten me--about why can we blame "diversity" for the bust when:
    1) bubbles happen all over the world to all sorts of populations, including that of Japan
    2) lenders need zero encouragement to lend when they're sure an asset class can't fall in price (i.e. banks were eager to make these home loans, not reluctant)
    3) the (unwise) effort to encourage homeownership was made in order to give poor Americans of all races, not just black or brown, a piece of the dream
    4) the rates of default among black and brown mortgage holders was especially high presumably because the rate of poverty among AAs and Latinos is disproportionately high (i.e. it's a poverty bust, not a diversity bust) and
    5) lots of lenders were telling borrowers they'd be excellent candidates while knowing full well that these people couldn't pay (i.e. old-fashioned fraud directed at all low-income borrowers, not just non-white ones).

    What am I missing?

    Replies: @Neuday

    Government coercion

    • Replies: @SEATAF
    @Neuday

    How coercion? There was government enabling, through Freddie and Fannie, but who was lending money against his will?

    Replies: @MarkinLA

  36. and likely reflect some level of specific targeting of minority populations and neighborhoods by predatory and subprime lenders.

    I haven’t read the study, so bear with me. The focus of government housing policy since the Clinton administration has been so-called affordability products for minority/low-income households, i.e. mortgage loans for borrowers with sub-prime credit scores.

    HUD gave Freddie and Fannie targets for loan originations, starting at 30% when Andrew Cuomo was HUD Secretary, rising to >50% in Bush administration, while down payments effectively shrunk to zero (ACORN-like entities putting up the 3%, and closing costs).

    Traditional mortgage underwriting is straightforward: credit score (prime), down payment (20%), payment to income (one-third). Once these criteria are abused, the underwriting risk of default goes up. That minority and low income borrowers defaulted at higher rates is a no-brainer precisely because underwriting criteria were altered due to government policy. The outcome was foreordained.

    The assumption that racial/ethnic lending predation caused the effect of high rates of racial/ethnic foreclosure is a tautology, a simple restatement of the baseline–not a cause/effect argument.

    The foreclosure racial/ethnic decomposition is an academic exercise worthy of counting the number of minority angels that fit on the head of a pin. Mental masturbation.

  37. @MarkinLA
    the exceptions are Hispanic-white and integrated neighborhoods, which experienced especially high rates of foreclosure (14.0 and 15.1) and were very likely to fall in the “high” or “very high” foreclosure classification.

    As this would indicate, the races don't tell the whole story. Take a place like Palmdale, California. It had a huge number of foreclosures not because of race but because it was a last ditch place for blue collar types to buy a house - any house. In addition, the prices were well above what anybody could reasonably afford. The only thing keeping it going was low teaser rates - 5 years at 2% then a reset and continual refinancing.

    Anybody looking at the boom-bust pricing of houses out there has seen this happen repeatedly in these last chance to buy a house neighborhoods. I bought a house there 100K cash with completely custom cabinets in the garage and a swimming pool and RV parking pad. The house sold new in 1991 for 130K without all the upgrades (everything inside the house is cheap, cheap, cheap). It had a 438K mortgage in 2006. Imagine other poor slobs in blue collar jobs having that type of mortgage reset to say 8% in the middle of the recession.

    A couple of years ago I saw one for sale at 200K and it was completely redone with designer kitchen and bathrooms. There must have been 80k worth of remodel to replace the original cheap cabinets and fixtures. How much did the bank lose on that one?

    Palmdale also suffered a price collapse after the defense industries moved out of California in the late 90s, just not as steep.

    Replies: @E. Rekshun

    How much did the bank lose on that one?

    In 2011, I bought a bank foreclosure in FL – a single family 2000 sf home on a golf course for $70K. Bank of America had given a loan for $250K in ’05; the borrower stopped making mortgage payments in ’08 and continued to live in the home for three years.

    Last month, I bought a foreclosed waterfront FL condominium from Fannie Mae for $170K. The unit last sold in ’05 for $250K. Fannie Mae foreclosed in Jan. 2015 for $264K. Then owner had lived in the unit for ten years and hadn’t paid down any of the mortgage and, in fact, took cash out of the place!

  38. @Twinkie
    @jJay


    There’s no ‘All-Asian’ group in those tables.
     
    If you were referring to Table 3, the reason is probably that "all-Asian" neighborhoods are virtually non-existent. Asians tend to have the highest rate of residing with non-co-ethnics among all the major ethno-racial groups. To put crudely and concisely, they like living with white people (and certain kinds of white people at that - those who are educated and affluent).

    "Asian-white" neighborhoods have the lowest foreclosure rate (4.31; all white 4.89). These are probably the most likely to be Murray's super zip codes. What was surprising for me was that "Hispanic-white" neighborhoods (14.00) had a higher foreclosure rate than mostly Hispanic (11.42) or mostly black neighborhoods (12.92; only outdone by "Integrated" neighborhoods, 15.14, whatever that means). Apparently, the whites who live next to or intermarry Hispanics are at the bottom of the pile, foreclosure-wise and probably in other socio-economic measurements.

    Replies: @Steve Sailer, @ren

    What was surprising for me was that “Hispanic-white” neighborhoods (14.00) had a higher foreclosure rate than mostly Hispanic (11.42) or mostly black neighborhoods (12.92; only outdone by “Integrated” neighborhoods, 15.14, whatever that means).

    Hispanic-white is actually more hispanic than it sounds because lots of ordinary Mexicans consider themselves white.

    My mexican relatives moved to the USA, married white guy and checked off white on the kids’ birth certificates. They wanted to be white. There is still plenty of that left.

  39. @Lot
    Four options for academic journal articles not free online:

    1. Polite email to the author. Most are flattered you are interested.

    2. Ask your son to download from a computer in his college library. Any campus dorm connection typically works too. Or just do it yourself next time you drive by a college.

    3. Have a college student or employee set up a proxy using their school ID on your computer. They don't have to even give you their password, it can be saved in the browser without showing it.

    4. Draft versions of a lot of articles are online at SSRN.

    Replies: @jay-w, @Kylie, @Harold, @theo the kraut

    overall correct, but re no 3: in any modern browser it takes only a few clicks to get the stored password if you’re tech savvy enough.

  40. @Neuday
    @SEATAF

    Government coercion

    Replies: @SEATAF

    How coercion? There was government enabling, through Freddie and Fannie, but who was lending money against his will?

    • Replies: @MarkinLA
    @SEATAF

    Most of the garbage loans were bought by Wall Street anyway. They were delighted to buy that junk because they had the idea that with the right math they could be diced up into bonds of different investment grades and sold off to places like Iceland who wanted a safe income stream.

  41. @SEATAF
    @Neuday

    How coercion? There was government enabling, through Freddie and Fannie, but who was lending money against his will?

    Replies: @MarkinLA

    Most of the garbage loans were bought by Wall Street anyway. They were delighted to buy that junk because they had the idea that with the right math they could be diced up into bonds of different investment grades and sold off to places like Iceland who wanted a safe income stream.

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