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These people were renting. All of a sudden with creative financing they get into a home with no money down and pay less for a payment than rent or close to rent.
Here comes the housing bubble and these people just walk away.
These people are renting again, out no pocket money at all.
Here is where it blows, how many took out seconds worth 50K 100K? Where's that money?
According to your article, these predatory lenders lent to anything with a pulse, illegal or not. But it's a good, detailed story and such a sad tale of naked greed - thanks for posting it! I look forward to lots of indictments and I hope those "low-income housing groups, Hispanic lawmakers, a congressional Hispanic housing initiative, mortgage lenders and brokers, who all were pushing to increase homeownership among Latinos," the Hispanic Congressional Caucus, and NAHREP and the rest will be made to answer for their complicity in this cruelty.
Your article states the sad fact from which all this misery sprang: "For years, immigrants to the U.S. have viewed buying a home as the ultimate benchmark of success."
Interestingly, it makes Freddie Mac look good concerning NINA loans; usually the WSJ has nothing good to say about FM.
Many loans to Hispanic borrowers were based not on actual income histories but on a borrower's 'stated income.' These so-called no-doc loans yielded higher commissions and involved less paperwork.
Another problem was so-called NINA -- no income, no assets -- loans. They were originally intended for self-employed people of means. But Freddie Mac executives worried about abuse, according to documents obtained by Congress. The program 'appears to target borrowers who would have trouble qualifying for a mortgage if their financial position were adequately disclosed,' said a staff memo to Freddie Mac Chairman Richard Syron. 'It appears they are disproportionately targeted toward Hispanics.'
***
"It's very hard to get in front of a train loaded with highly profitable activities and stop it," [said the] chairman of the Federal Housing Finance Board.
Here's a similar, though not as sweeping, story about the collapse of Washington Mutual that illustrates the feeding frenzy among lenders:
On another occasion, Ms. Zaback asked a loan officer for verification of an applicant’s assets. The officer sent a letter from a bank showing a balance of about $150,000 in the borrower’s account, she recalled. But when Ms. Zaback called the bank to confirm, she was told the balance was only $5,000.
The loan officer yelled at her, Ms. Zaback recalled. “She said, ‘We don’t call the bank to verify.’ ”
***
By 2005, the word was out that WaMu would accept applications with a mere statement of the borrower’s income and assets — often with no documentation required — so long as credit scores were adequate, according to Ms. Zaback and other underwriters.
Another example of big business exploiting not only the people (legal and illegal) but also the government as they alway know Uncle Sam will bail them out. Funny... still don't see how illegals caused this mess. Still points back to big business.
I got to know them personally.
Only some of their kids were dual citizens....the rest were mexican nationals.
We had the same thing happen in California. I had read back in 2002 or 2003 about mortgage companies targeting "cash only income/no credit score" familes for home loans, then soon read about seminars on home buying being given in Spanish, in Hispanic neighborhoods. I just remember thinking, are these companies crazy? This is going to bite them in the @ss!
We had a Mexican family (mom, dad, 4 kids) buy the 2 bdr. condo above us for over $375K, which was about 3 times what we paid for ours 6 years earlier. When they moved in, they had no furniture - just bags of clothes. One old car, and the husband was a laborer. I speak Spanish, so I could talk to the parents, but they didn't speak a word of English, although their kids did. So I was doing the math, and couldn't figure out how on earth they could have afforded this mortgage. The math just didn't work. Soon they moved a second family into the other bedroom, and we had 10 or 11 people living above us in 1000 sq. ft. They were very nice people, and their kids were well behaved, but as we saw the same thing happening every time a condo sold in our complex, and then saw houses in our neighborhood being bought by multiple families, we figured this was really going to blow the housing bubble. We sold our condo for over $400K in 2005, and left the state - bought a nice house in Denver for not much more than we sold the condo for, and our house here is still worth more than we paid for it.
So that condo that was above ours ended up in forclosure, as have many others in that complex. Prices on the same 2 bdr. unit are now down to $200K and lower. Their HOA is owed over $50K in back dues, has no money to fix anything, so the place is deteriorating, meaning prices will go lower. Why the mortgage industry was allowed to do this is beyond me. I'm no genious, but I could see this coming a mile away. And obviously it wasn't just Mexican immigrants who caused this - plenty of people of all races were buying houses they couldn't afford, adding to the problem. The thing that got me with the Mexican family was that I believe they were very naive about home ownership (they couldn't believe we paid so much less for the same condo, and didn't understand how prices fluctuate based on supply/demand) and I believe they were duped by predatory lenders. From what I read, lenders obviously sought out illegal immigrants and got them to buy houses, making a few lenders rich in the short term.
The thing that got me with the Mexican family was that I believe they were very naive about home ownership (they couldn't believe we paid so much less for the same condo, and didn't understand how prices fluctuate based on supply/demand) and I believe they were duped by predatory lenders. From what I read, lenders obviously sought out illegal immigrants and got them to buy houses, making a few lenders rich in the short term.
Yes. And horribly, there were a number of groups that should have been protecting and helping these people, and instead sold them out to their partners in business. The Hispanic Congressional Caucus, NAHREP, "low-income housing groups, Hispanic lawmakers, a congressional Hispanic housing initiative, mortgage lenders and brokers, who all were pushing to increase homeownership among Latinos," for example.
The whole story is a testament to cruelty and greed.
The WSJ Journal is pro-business, pro-global, and Neoconservative in orientation. They support open borders, the Middle East wars, and are pro-immigration. They aren't exactly an unbiased source all of the time, but on this article they have been quite clear for once.
PS The WSJ deliberately misuses the term "immigrant" when they really mean "illegal immigrant" which is more clear, which really is a poor upholding of journalistic standards.
This was not all "predatory" in nature. Many, many, and even more than many Hispanic and rainbow coalitionist groups pushed (some say extorted) the US lenders to help the "underserved".
It's STILL happening!
Here is a “high browed” Hispanic ethnocentric special interest group in Los Angeles (financed by the usual corporate suspects) is preparing for a SECOND ROUND of fomenting mortgage lending activities to the “underserved” Hispanic population in this country!
Bush and Clinton were both on board with this kind of stuff. The Clinton Administration was threatening mortgage lenders with civil rights violations, if they didn’t make these risky loans.
The WSJ Journal is pro-business, pro-global, and Neoconservative in orientation. They support open borders, the Middle East wars, and are pro-immigration. They aren't exactly an unbiased source all of the time, but on this article they have been quite clear for once.
PS The WSJ deliberately misuses the term "immigrant" when they really mean "illegal immigrant" which is more clear, which really is a poor upholding of journalistic standards.
This was not all "predatory" in nature. Many, many, and even more than many Hispanic and rainbow coalitionist groups pushed (some say extorted) the US lenders to help the "underserved".
It's STILL happening!
Here is a “high browed” Hispanic ethnocentric special interest group in Los Angeles (financed by the usual corporate suspects) is preparing for a SECOND ROUND of fomenting mortgage lending activities to the “underserved” Hispanic population in this country!
Bush and Clinton were both on board with this kind of stuff. The Clinton Administration was threatening mortgage lenders with civil rights violations, if they didn’t make these risky loans.
Agree, true about the WSJ - except I dont see the implied "illegal" adjective in the article. Could be there but I dont see it. When I first read the article I was expecting and looking for the typical WSJ slant but to my surprise didn't find it.
(The link in the initial post to the map, that title actually is "...Hits Hispanics Hard", btw; I think that might have been the OP's deliberate subtle edit but can't speak for him/her.)
True about the groups that should have protected but instead were complicit in the abuse. I hadn't known about that before I read this article (though I'm sure there's plenty of information around) and it shocked me. Thanks for posting the wcvi.org link.
Bush and "the ownership society"...financial sector lapdog.
In the Clinton days those loans were purer of purpose, hence the threatened civil-rights lawsuits. By 2004-5-6 it was crazy out of hand - there's a link on page 1 to an article about WaMu in its supernova stage that would make you laugh if it didnt make you throw up. Freddie Mac caught on eventually and stopped offering NINA loans in 2007.
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