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The same one that you inhabit. Take Florida for example, the largest number of defaults are in those brand new shinny white gated communities and condos. From what I have seen in Arizona the case is the same. I can guarantee that the house flippers and speculators weren't banking on houses in Liberty City.
Everything you posted was great, except that list of "affluent non minority" areas. Although affluent, I would think they also have a large immigrant population. I'm not lookig at stats, or anything. Just my own observation.
Everything you posted was great, except that list of "affluent non minority" areas. Although affluent, I would think they also have a large immigrant population. I'm not lookig at stats, or anything. Just my own observation.
I know that it is hard to come to grips with the fact that there is no correlation between income and defaults, that the attempt to blame the current crisis on low to moderate income home owners, more specifically people of color is a bit hard for "Real Americans™" to come to grips with. I realize that having to accept the fact that shiftless fast talking mortgage lenders, bankers and bond analysis who looked the other way, and the cream of the Harvard and Wharton's business schools devised a house of cards built out of bizarre mortgage back financial instruments are the actual culprits. Because I know how sacred the belief that the markets, when left to their own devices, will create good and plenty for society. For having to dissuade you of your beliefs, I apologize. No one likes having the emperor exposed and naked for all to see.
I know that it is hard to come to grips with the fact that there is no correlation between income and defaults, that the attempt to blame the current crisis on low to moderate income home owners, more specifically people of color is a bit hard for "Real Americans™" to come to grips with. I realize that having to accept the fact that shiftless fast talking mortgage lenders, bankers and bond analysis who looked the other way, and the cream of the Harvard and Wharton's business schools devised a house of cards built out of bizarre mortgage back financial instruments are the actual culprits. Because I know how sacred the belief that the markets, when left to their own devices, will create good and plenty for society. For having to dissuade you of your beliefs, I apologize. No one likes having the emperor exposed and naked for all to see.
More info:
"The recent sharp increase in mortgage defaults is significantly amplified in subprime zip codes, or zip codes with a disproportionately large share of subprime borrowers as of 1996. Prior to the default crisis, these subprime zip codes experience an unprecedented relative growth in mortgage credit. The expansion in mortgage credit from 2002 to 2005 to subprime zip codes occurs despite sharply declining relative (and in some cases absolute) income growth in these neighborhoods. In fact, 2002 to 2005 is the only period in the last eighteen years when income and mortgage credit growth are negatively correlated. We show that the expansion in mortgage credit to subprime zip codes and its dissociation from income growth is closely correlated with the increase in securitization of subprime mortgages." SSRN-The Consequences of Mortgage Credit Expansion: Evidence from the U.S. Mortgage Default Crisis by Atif Mian, Amir Sufi
More from the above:
"The sharp rise in U.S. mortgage default rates has led to the most severe financial crisis since the Great Depression. A salient feature of the mortgage default crisis is that it is concentrated in subprime zip codes throughout the entire country. A comparison of subprime and prime zip codes, which are defined to be zip codes in the highest and lowest quartile based on the fraction of borrowers with a credit score under 660 as of 1996, reveals that subprime zip codes experience an increase in default rates since 2006 that is more than three times as large as prime zip codes in the same metropolitan area."
The same one that you inhabit. Take Florida for example, the largest number of defaults are in those brand new shinny white gated communities and condos. From what I have seen in Arizona the case is the same. I can guarantee that the house flippers and speculators weren't banking on houses in Liberty City.
My reply was to your "non-minority" "affluent" statement. That comment doesn't hold water.
Miami is over 87% minority.
Los Angeles is over 87% minority. (wierd almost the same as Miami)
Phoenix is about 39% minority.
Las Vegas 37%
San Diego 54%
These are all very conservative #'s, we all know alot of "minorities" are unaccounted for. Also as far as affluence goes, all of these areas are real close to or below state averages for income.
None of the areas you mentioned as "the worst" for price decreases are affluent or "non-minority". They seem rather poor and minority rich. Which would make them historically and statistically less educated areas. There are always exceptions though.
To say that the CRA had no effect on housing prices and lending practices in these areas would be false.
Last edited by nevergoingback; 02-18-2009 at 09:19 PM..
Nice abstract and interesting from a micro perspective but it says very little regarding the overall picture of sub-prime lending. In fact all that it states, which is not news, is that subprime lending increased regardless of income decline in pre-selected communities. We all know that there was an increase in sub-prime lending in the period between 2000-2005.
McDash Analytics, compared localized data from March 2007 and March 2008; and found that default rates for all loan types rose significantly over that 12-month period, with subprime defaults vastly outstripping prime defaults but found that among subprime borrowers, income level had little correlation to foreclosure rates: in short subprime borrowers in more prosperous communities defaulted at nearly the same rate by March 2008 as those that defaulted in impoverished areas.
Key findings of the Department of Housing and Urban Development analysis show that: 1) From 1993 to 1998, the number of subprime refinancing loans increased ten-fold. 2) Subprime loans are three times more likely in low income neighborhoods than in high-income neighborhoods. 3) Subprime loans are five times more likely in black neighborhoods than in white neighborhoods. 4) Homeowners in high-income black areas are twice as likely as homeowners in low-income white areas to have subprime loans. Unequal Burden: Income and Racial Disparities in Subprime Lending in America
If you want to blame non-white Cubans as a minority go for it. I concede your point although I have no clue as to what it is.
Quote:
Originally Posted by ovcatto
You mean your abstract.
Cubans wouldn't be a minority? Re read my post (#27), I accidentally hit post before I was finished. You are quick on the trigger!!
My point is that the CRA increased SPL to minorities and poor people with bad credit because of the fear of being fined by the federal govt.
next --- look at credit scores and actual numbers ---a tenfold increase does not a trend make
house of cards
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