June 20, 2013

The housing crisis has claimed more than five million American homes—about 10% of all homes with a mortgage. It began in lower-income neighborhoods and has spread to some of the most exclusive addresses in the United States. Many experts believe that the mortgage meltdown started years ago when banks, discovering the high returns from selling bundles of securitized mortgages, relaxed lending standards and originated millions of adjustable-rate subprime mortgages (ARM). These loans were designed to allow just about anyone to get a home loan.

During the real estate bubble years, Hispanics accounted for more than half of the U.S. population increase, exceeding estimates in most states as they crossed a new census milestone: 50 million, or 1 in 6 Americans. Many Hispanic families had multiple wage earners working multiple cash jobs, but had no savings or established credit history to allow them to qualify for traditional loans.

The Latino community appeared to be a a largely untapped demographic in the U.S. housing market. For years, immigrants to the U.S. have viewed buying a home as the ultimate benchmark of success, yet in 2003 the national Latino homeownership rate was 47%, compared with 68% for the overall population. Low-income housing groups, Hispanic lawmakers, a congressional Hispanic housing initiative, and mortgage lenders and brokers all were pushing hard to increase homeownership among Latinos.

In 2003, the Congressional Hispanic Caucus created Hogar to work with industry and community groups to increase mortgage lending to Latinos. Members of the caucus, who received donations from the lending industry and saw their constituents moving into new homes, pushed for eased lending standards, which fueled the subprime phenomenon among Latinos.

Between 2000 and 2007, as the Hispanic population increased, Hispanic homeownership grew even faster, increasing by 47%, to 6.1 million from 4.1 million, fueled by "non-prime" mortgages, which often don't require solid credit ratings or documentation of employment. (Over that same period, homeownership nationally grew by 8%.) In 2005 alone, mortgages to Hispanics jumped by 29%, with expensive nonprime mortgages soaring 169%.

Hispanics’ increasing numbers in the so-called “sand states” had a lot to do with the bubble’s disproportionate influence in those regions. When the interest rates for subprime borrowers' low capital, easy-credit, subprime ARM loans started climbing, many borrowers began falling behind on their payments, leading to the first wave of defaults.

Without the large levels of Hispanic immigration over the past decade, the bubble may still have happened but it seems unlikely that it scale would have been quite so huge and the wave of defaults quite so numerous.

CENSUS: 42 States Info Released, Hispanic Population Accounts for 54% of All Growth

Hispanically Speaking News
March 21, 2011

Based on the aggregation of the population residing on the 42 states released thus far by Census:
  • Hispanic population growth is exceeding the most recent Census estimates by 4.3 percent.
  • More than 45 million Hispanics in the 42 states released as of 3-17-11.
  • Hispanics contributed 54 percent of the overall population growth in those states.
  • From Census 2000-2010, the Hispanic population in these states grew by 45 percent.
  • Hispanics are growing four times faster than the total U.S. population.
  • More than 14 million “new Hispanics” were added to the population of the 42 states released by Census, compared to 11.8 million “new non-Hispanics” added to the residents of the 42 states released by Census in 2000.
The Census 2010 figures are showing the Hispanic population is less concentrated than 10 years ago. In 2000, 56 percent of the Hispanic population residing in the 42 states released by Census resided either in California or Texas. By 2010, 52 percent of Hispanics reside either in Texas or California.

The latest figures released for Florida, Georgia, Montana, New Mexico, Kentucky, Alaska, Minnesota, North Dakota, and Tennessee show:
  • Hispanics contributed nearly 55 percent of the population growth in Florida. The Hispanic population is growing six times faster than non-Hispanics in the state.
  • The Hispanic population in Georgia grew 96 percent in the last decade. Hispanics are the fastest growing demographic in the state.
  • In Montana, the Hispanic population is growing seven times faster than non-Hispanics in the state. In the last 10 years, the Hispanic population in the state grew 58 percent.
  • Hispanics in New Mexico accounted for 78 percent of the growth.
  • The Hispanic population in Kentucky more than doubled in the last decade.
  • In Alaska, the Hispanic population grew about 52 percent since Census 2000. Among Hispanic population growth in the state, Adults 18 plus accounted for 66 percent of Hispanic growth in the state while Hispanics under 18 contributed the remaining 34 percent of the growth.
  • In Minnesota, the Hispanic population grew nearly 75 percent since Census 2000.
  • The Hispanic population in North Dakota grew 73 percent since Census 2000. 1 out of every 5 individuals added to the total population in the state is of Hispanic origin.
  • In Tennessee, the Hispanic population more than doubled in the last decade.
“With the data for 42 states revealed, we have a real snapshot of the new face of our nation being driven by the explosive demographic growth of U.S. Hispanics,” said Elizabeth Ellers, executive vice president, Corporate Research, Univision Communications Inc.
Published in Notitas de Noticias

New Census Milestone: Hispanics Reach 50 Million

The Associated Press
March 24, 2011

Hispanics accounted for more than half of the U.S. population increase over the last decade, exceeding estimates in most states as they crossed a new census milestone: 50 million, or 1 in 6 Americans.

The first results from the 2010 Census are in, and the U.S. population stands at 308,745,538. That represents 27.3 million more people than in 2000, or 9.7 percent increase in the U.S. population. The number of people added to the population between 2000 and 2010 was lower than it was during the 1990s (32.7 million), and the percent change was the lowest since the 1930s. Population growth continued to shift to the South and West, while the Northeast and Midwest lagged far behind. The District of Columbia, which had lost population during the 1990s, grew 5 percent—the first increase since the 1940s. [Source]
Meanwhile, more than 9 million Americans checked two or more race categories on their 2010 census forms, up 32 percent from 2000, a sign of burgeoning multiracial growth in an increasingly minority nation.

The Census Bureau on Thursday released its first set of national-level findings from the 2010 count on race and migration, detailing a decade in which rapid minority growth, aging whites and the housing boom and bust were the predominant story lines.

Analysts said the results confirmed a demographic transformation under way that is upending traditional notions of racial minorities, political swing districts, even city and suburb.
"These are big demographic changes," said Mark Mather, an associate vice president at the nonprofit Population Reference Bureau. "There is going to be some culture shock, especially in communities that haven't had high numbers of immigrants or minorities in the past."
"By 2050, we may have an entirely new system of defining ourselves," he said.
According to data released Thursday, Americans continued their decades-long migration to fast-growing parts of the Sun Belt. Their move to big states such as California and Texas as well as fast-growing Mountain West states pushed the nation's mean center of population roughly 30 miles southwest to a spot near the village of Plato, Mo.

African-Americans in search of wider spaces increasingly left big cities such as Detroit, Chicago and New York for the suburbs, typically in the South. Both Michigan and Illinois had their first declines in the black population since statehood as many of their residents opted for warmer climes in the suburbs of places such as Atlanta, Dallas and Houston.

The smaller numbers were a surprise to some city officials, including New York Mayor Michael Bloomberg, who questioned the census count of 8.2 million for his city and suggested immigrants may have been missed.
Census director Robert Groves said the agency had not yet received any formal complaints about the census count and that overall indicators showed high accuracy in 2010 compared to 2000.

After initial fears of low participation, the 2010 count of the Hispanic population came in 900,000 higher than expected, matching or surpassing census estimates in 37 states, according to the Pew Hispanic Center, a nonpartisan think tank.

Many of the biggest jumps were in the South, including Alabama, Louisiana, North Carolina and Louisiana, where a small but fast-growing Hispanic population was fueled by an influx of immigrants during the housing boom.

Multiracial Americans now make up 2.9 percent of the U.S. population, a steadily growing group — even if it did not include President Barack Obama, who identified himself only as African-American on his census form. Obama's mother Ann Dunham, a white woman from Kansas, married his father, the Kenyan native Barack Obama Sr.

The vast majority of multiracial Americans lived in California, Texas, New York and Hawaii. The most numerous race combinations were white-American Indian or Alaskan Native, white-black and white-"some other race." In some cases, white Hispanics may be opting to list themselves as multiracial in the "some other race" category, which would put the actual number of multiracial Americans lower than the official tally of 9 million.

In all, racial and ethnic minorities made up about 90 percent of the total U.S. growth since 2000, part of a historic trend in which minorities are expected to become the majority by midcentury.
"Hispanics and immigrant minorities are providing a much needed tonic for an older, largely white population which is moving into middle age and retirement," said William Frey, a demographer at the Brookings Institution who analyzed many of the census figures. "They will form the bulk of our labor force growth in the next decade as they continue to disperse into larger parts of the country."
Among census findings:
  • The number of non-Hispanic whites, whose median age is now 41, edged up slightly to 196.8 million. Declining birth rates meant their share of the total U.S. population dropped over the last decade from 69 percent to roughly 64 percent.
  • In about 10 states, the share of children who are minorities has already passed 50 percent, up from five states in 2000. They include Mississippi, Georgia, Maryland, Florida, Arizona, Nevada, Texas, California, New Mexico and Hawaii.
  • Asians grew by 43 percent over the last decade. They were tied with Hispanics as the fastest growing demographic group. For the first time Asians also had a larger numeric gain than African-Americans, who remained the second largest minority group at 37.7 million.
The race figures come as states in the coming months engage in the contentious process of redrawing political districts based on population and racial makeup. The new political maps — which will also change each state's electoral votes — will take effect by the 2012 elections.

Many of the states in the South and West that are picking up House seats are Republican leaning, such as Texas and Florida. But most of their growth is now being driven largely by Hispanics, who tend to vote Democratic, which could put those regions in play.

In Texas, which picks up four House seats, the chair of the state Senate's redistricting panel has acknowledged that at least one House seat in north Texas could be a "minority or Hispanic influence district." Republicans are also rejecting the notion they can't appeal to Hispanics, who accounted for two-thirds of the state's population gains from 2000 to 2010.
"Our legislators represent all their constituents," said Texas Republican Party spokesman Chris Elam. He and others noted that the party picked up — narrowly — two heavily Hispanic congressional seats from Democrats in South Texas.
In New Jersey, Republicans are forming an unusual alliance with some Hispanics, who just surpassed African- Americans as that state's largest minority group. Both groups are looking for a political map — in this case, involving legislative districts — that offers a more competitive edge.

New Jersey must have its map completed by April 3, with legal challenges all but certain to follow.
"For us, it's not about parties, it's about whether Latinos are going to have Latinos in the Statehouse," said Martin Perez, president of the Latino Leadership Alliance of New Jersey, who said he has met with Republicans.
In large metropolitan regions, U.S. suburbs are becoming more politically competitive because of their fast growth and changing demographics, said Robert Lang, a demographer at the University of Nevada-Las Vegas. He noted that minorities are increasingly moving from cities to nearby suburbs, while more conservative whites living in far-flung suburbs known as exurbs were moving closer to cities due to a spike in gas prices and the housing bust.
"That's the new contested space," Lang said, noting that Democrat Obama was able to win many suburban areas in 2008 before Republicans reclaimed much of the turf in the 2010 elections. "They grew the fastest in the last decade without resolving which way they will vote."
According to census, the 10 fastest-growing cities over the last decade were actually suburbs of major metropolitan areas. They included Lincoln, Calif.; Surprise, Ariz.; and Frisco, Texas, all of whose population more than tripled since 2000.

In all, U.S. metropolitan areas grew more than 10 percent over the last decade. It was also home to a record share of 83.7 percent of the U.S. population, with much of the growth in suburban areas.
"We expect this to continue," Groves said.
California Rep. Joe Baca has long pushed legislation he said would "open the doors to the American Dream" for first-time home buyers in his largely Hispanic district. For many of them, those doors have slammed shut, quickly and painfully.

Mortgage lenders flooded Mr. Baca's San Bernardino, Calif., district with loans that often didn't require down payments, solid credit ratings or documentation of employment. Now, many of the Hispanics who became homeowners find themselves mired in the national housing mess. Nearly 9,200 families in his district have lost their homes to foreclosure.

Foreclosure Crisis Hits Hispanics

The Wall Street Journal
January 5, 2009

Congressional districts with large Hispanic populations often feature heavy nonprime lending. See how different districts break down in terms of prime and nonprime home loans.

For years, immigrants to the U.S. have viewed buying a home as the ultimate benchmark of success. Between 2000 and 2007, as the Hispanic population increased, Hispanic homeownership grew even faster, increasing by 47%, to 6.1 million from 4.1 million, according to the U.S. Census Bureau. Over that same period, homeownership nationally grew by 8%. In 2005 alone, mortgages to Hispanics jumped by 29%, with expensive nonprime mortgages soaring 169%, according to the Federal Financial Institutions Examination Council.

An examination of that borrowing spree by The Wall Street Journal reveals that it wasn't simply the mortgage market at work. It was fueled by a campaign by 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 network included Mr. Baca, chairman of the Congressional Hispanic Caucus, whose district is 58% Hispanic and ranks No. 5 among all congressional districts in percentage of home loans not tailored for prime borrowers. The caucus launched a housing initiative called Hogar -- Spanish for home -- to work with industry and community groups to increase mortgage lending to Latinos. Mortgage companies provided funding to that group, and to the National Association of Hispanic Real Estate Professionals, which fielded an army to make the loans.

In years past, minority borrowers seeking loans were often stopped cold by a practice called red-lining, in which lenders were reluctant to lend within particular geographical areas, often, it appeared, on the basis of race. But combined efforts to open the mortgage pipeline to Latinos proved successful.
"We saw what we refer to in the advocacy community as reverse red-lining," says Aracely Panameno, director of Latino affairs for the Center for Responsible Lending, an advocacy group. "Lenders were seeking out those borrowers and charging them through the roof," she says.
Ms. Panameno says that during the height of the housing boom she sought to present the Hispanic Caucus with data showing how many Latinos were being steered into risky and expensive subprime loans. Hogar declined her requests, she says.

Housing Push for Hispanics Spawns Wave of Foreclosures

The Wall Street Journal
January 5, 2009

When the national housing market began unraveling, so did the fortunes of many of the new homeowners. National foreclosure statistics don't break out data by ethnicity or race. But there is evidence that Hispanic borrowers have been hard hit. In part, that's because of large Hispanic populations in areas where the housing bubble was pronounced, such as Southern California, Nevada and Florida.

In U.S. counties where Hispanics account for more than 25% of the population, banks have taken back 6.7 homes per 1,000 residents since Jan. 1, 2006, compared with 4.6 per 1,000 residents in all counties, according to a Journal analysis of U.S. Census and RealtyTrac data.

Hispanic lawmakers and community groups have blamed subprime lenders, who specialize in making loans to customers with spotty credit histories. They complain that even solid borrowers were steered to those loans, which carry higher interest rates.

In a written statement, Mr. Baca blamed the foreclosure crisis among Hispanics on borrowers' lack of "financial literacy" and on "lenders and brokers eager to make a bigger profit." He declined to be interviewed for this story.

Easy Credit

But a close look at the network of organizations pushing for increased mortgage lending reveals a more complicated picture. Subprime-industry executives were advisers to the Hogar housing initiative, and bankrolled more than $2 million of its research. Lawmakers and advocacy groups pushed hard for the easy credit that fueled the subprime phenomenon among Latinos. Members of the Congressional Hispanic Caucus, who received donations from the lending industry and saw their constituents moving into new homes, pushed for eased lending standards, which led to problems.

Mortgage lenders appear to have regarded Latinos as a largely untapped demographic. Many were first or second-generation U.S. residents who didn't own homes. Many Hispanic families had multiple wage earners working multiple cash jobs, but had no savings or established credit history to allow them to qualify for traditional loans.

The Congressional Hispanic Caucus created Hogar in 2003 to work with industry and community groups to increase mortgage lending to Latinos. At that time, the national Latino homeownership rate was 47%, compared with 68% for the overall population. Hogar called the figure "alarming," and said a concerted effort was required to ensure that "by the end of the decade Latinos will share equally in the American Dream of homeownership."

Hogar's backers included many companies that ran into trouble in mortgage markets: Fannie Mae and Freddie Mac, both now under federal control; Countrywide Financial Corp., sold last year to Bank of America Corp.; Washington Mutual Inc., taken over by the government and sold to J.P. Morgan Chase & Co.; and New Century Financial Corp. and Ameriquest Mortgage Corp., both now defunct.

Hogar's ties to the subprime industry were substantial. A Washington Mutual vice president served as chairman of its advisory committee. Companies that donated $150,000 a year got the right to place a research fellow who would conduct Hogar's studies, which were used by industry lobbyists. For donations of $100,000 a year, Hogar offered to provide news releases from the Hispanic Caucus promoting a lender's commercial products for the Latino market, according to the group's literature.

Hogar worked with Freddie Mac on a two-year examination of Latino homeownership in 63 congressional districts. The study found Hispanic ownership on the rise thanks to "new flexible mortgage loan products" that the industry was adopting. It recommended further easing of down-payment and underwriting standards.
Representatives for Hogar declined repeated requests for comment.

The National Association of Hispanic Real Estate Professionals, one of Hogar's sponsors, advised the group, shared research data and built a large membership to market loans to Latinos. By 2005, its ranks had grown to 16,000 agents and mortgage brokers.

The association, called Nahrep, received funding from some of the same players that funded Hogar. Some 22 corporate sponsors, including Countrywide and Washington Mutual, together paid the association $2 million a year to attend conferences and forums where lenders could pitch their loan products to loan brokers.
While home prices were rising, the lending risk seemed minimal, says Tim Sandos, Narhep's president.
"We would say, 'Is he breathing? OK, we'll give him a mortgage,' " he recalls.
Nahrep's 2006 convention in Las Vegas was called "Place Your Bets on Home Ownership." Countrywide Chairman Angelo Mozilo spoke, as did former Housing and Urban Development Secretary Henry Cisneros, a force in Latino housing developments in the West.

Lenders' Contributions

Countrywide and other sponsors contracted with Nahrep to set up regional events where they could present loan products to loan brokers and their customers. Mr. Sandos says his organization doesn't get paid to promote particular lenders.

At the height of the subprime lending boom, in 2005, banking and finance companies gave at least $2.3 million in campaign contributions to members of the Hispanic Caucus, according to data from the Center for Responsive Politics.

In October 2008, a charitable foundation set up by Mr. Baca received $25,000 from AmeriDream Inc., a nonprofit housing company and Hogar sponsor. Mr. Baca has long backed AmeriDream's controversial seller-financed down-payment assistance program. AmeriDream provided down-payment money to buyers, a cost that was covered by home builders in the form of donations to the nonprofit.

New housing legislation last fall outlawed the program. Mr. Baca is cosponsoring a bill that would allow AmeriDream and similar nonprofits to resume arranging seller-financed down-payment assistance to low-income Federal Housing Administration borrowers.

Such seller-financed loans comprise one-third of the loans backed by the FHA, and have defaulted at nearly triple the rate of other FHA-insured loans, according to agency spokesman William Glavin.

In a news release, AmeriDream said the donation to Mr. Baca's foundation was intended to fund the purchase of gear for firefighters in his district. Local news reports say the foundation gave away $36,000 in scholarships this year.

Internal Revenue Service records indicate that Mr. Baca's son, Joe Baca Jr., has an annual salary of $51,800 as executive director of the Joe Baca Foundation, which is run out of the congressman's home. Joe Baca Jr. says he currently is taking only about half that listed salary.

Mr. Baca's office declined to comment on the AmeriDream contribution.

Mr. Baca remains opposed to strict lending rules.
"We need to keep credit easily accessible to our minority communities," he said in a statement released by his office.
Mortgage lending to Hispanics took off between 2004 and 2007, powered by nonprime loans. The biggest jump occurred in 2005. The 169% increase in nonprime mortgages to Hispanics that year outpaced a 122% gain for blacks, and a 110% increase for whites, according to a Journal analysis of mortgage-industry and federal-housing data. Nonprime mortgages carry high interest rates and are tailored to borrowers with low credit scores or few assets.

Between 2004 and 2007, black borrowers were offered nonprime loans at a slightly higher rate than Hispanics, but the overall number of Hispanic borrowers was much larger. From 2004 to 2005, total nonprime home loans to Hispanics more than tripled to $69 billion from $19 billion, and peaked in 2006 at $73 billion.

Tricks of the Trade

Mortgage brokers became a key portion of the lending pipeline. Phi Nguygn, a former broker, worked at two suburban Washington-area firms that employed hundreds of loan originators, most of them Latino. Countrywide and other subprime lenders sent account representatives to brokerage offices frequently, he says. Countrywide didn't respond to calls requesting comment.

Representatives of subprime lenders passed on "little tricks of the trade" to get borrowers qualified, he says, such as adding a borrower's name to a relative's bank account, an illegal maneuver. Mr. Nguygn says he's now volunteering time to help borrowers facing foreclosure negotiate with banks.

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."
Freddie Mac says it tightened down-payment requirements in 2004 and stopped buying NINA loans altogether in 2007.
"It's very hard to get in front of a train loaded with highly profitable activities and stop it," says Ronald Rosenfeld, chairman of the Federal Housing Finance Board, a government agency that regulates home loan banks.
Regions of the country where the housing bubble grew biggest, such as California, Nevada and Florida, are heavily populated by Latinos, many of whom worked in the construction industry during the housing boom. When these markets began to weaken, bad loans depressed the value of neighboring properties, creating a downward spiral. Neighborhoods are now dotted with vacant homes.

By late 2008, one in every nine households in San Joaquin County, Calif., was in default or foreclosure -- 24,049 of them, according to Federal Reserve data. Banks have already taken back 55 of every 1,000 homes. In Riverside, Calif., 66,838 houses are owned by banks or were headed in that direction as of October. In Prince William County, Va., a Washington suburb, 11,685 homes, or one in 11, was in default or foreclosure.

Gerardo Cadima, a Bolivian immigrant who works as an electrician, bought a home in suburban Virginia for $330,000, with no money down.
"I said this is too good to be true," he recalls. "I'm 23 years old, with a family, buying my own house."
When work slowed last year, Mr. Cadima ran into trouble on his adjustable-rate mortgage.
"The payments were increasing, and the price of the house was starting to drop," he says. "I started to think, is this really worth it?" He stopped making payments and his home was sold at auction for $180,000.
In the wake of the housing slump, some participants in the Hispanic lending network are expressing second thoughts about the push. Mr. Sandos, head of Nahrep, says that some of his group's past members, lured by big commissions, steered borrowers into expensive loans that they couldn't afford.

Nahrep has filed complaints with state regulators against some of those brokers, he says. Their actions go against Nahrep's mission of building "sustainable" Latino home ownership.

These days, James Scruggs of Northern Virginia Legal Services is swamped with Latino borrowers facing foreclosure.
"We see loan applications that are complete fabrications," he says. Typically, he says, everything was marketed to borrowers in Spanish, right up until the closing, which was conducted in English.
"We are not talking about people working for the World Bank or the IMF," he says. "We are talking about day laborers, janitors, people who work in restaurants, people who do babysitting."
Two such borrowers work in Mr. Scrugg's office. Sandra Cardoza, a $28,000-a-year office manager, is now $30,000 in arrears on loans totaling $370,000.
"Her loan documents say she makes more than me," says Mr. Scruggs.
Nahrep agents are networking on how to negotiate "short sales" to banks, where Hispanic homeowners sell their homes at a loss in order to escape onerous mortgages. The association has a new how-to guide:
"The American Nightmare: Strategies for Preventing, Surviving and Overcoming Foreclosure."

Foreclosure Crisis Hits Minorities Hard

Subprime lenders aggressively marketed their high interest and high fee loans to minorities. Research by Committee for Responsible Lending (CRL) found that about 17% of Latino homeowners and 11% of African American homeowners have already lost their home to foreclosure or are at imminent risk of doing so. The percentage among non-Hispanic white borrowers is 7%. [Foreclosure Crisis Hits Minorities Hard, DailyFinance, June 18, 2010]

According to the Fraud Files Blog:

A discussion of the fact that minorities are being foreclosed on at higher rates than whites is meaningless unless we have other information, namely:
  • What circumstances surrounded the home purchases?
  • How much of the borrower’s income did the home purchase eat up? (i.e. Could the borrower really afford the home?)
  • What prompted the foreclosures?
  • What kind of credit histories do the buyers have?
  • Did the homeowners attempt to avoid foreclosure? By doing what?

‘Flashback: Buyers Waiting for Prices to Fall’ in Florida

Comment by bashfullbill, The Housing Bubble Blog
October 9, 2006

Off the topic but fascinating just the same, I saw something this weekend that was mind boggling: Real Estate being sold at the flea market. There are 2 flea markets out here in Oakland, one near the collisium, and one near a small community college. Of the vast majority of the shopper that go there, around 75% are hispanic.

In the last few months I’ve noticed a weird phenomenon. Brightly colored tents with reams of printed listings hang from ropes running back and forth accompanied by “open house” signs began showing up at both flea markets. At first there was maybe one two. This last weekend I counted around 15 at one, and 5 or 6 at the other. Almost every company was represented: Century 21, Caldwell banker, etc etc.

All the houses listed were in prime ghetto country; West Oakland, Richmond, as well as listings 50-60 miles out of town in places like Manteca. The prices were all in the 350-500k range, which for bubbly California sounds ” cheap” compared to the median, but not when you consider that most of the people looking at these houses were likely burger flippers, janitors, and leaf blowers who had just come across the border.

I wish I had brought my camera. It is astonishing. I couldn’t help myself when I walked into one booth and said: ” it must be a sign of how well RE is doing when houses start showing up for sale at flea markets” -- needless to say the agent wasn’t amused…

Immigration and the Housing Bubble

April 18, 2009

There clearly were many factors in the housing bubble, all of which aligned to create a perfect storm of sorts: higher levels of leverage among investment banks, a trade imbalance, reliance by institutional investors on misleading ratings by ratings agencies, inflationary monetary policy, conversion of housing assets into opaque financial instruments, reduced lending standards, the pressures of the Community Reinvestment Act, the mystique of home ownership, business models that invited fraud, and a pervasive mania of speculation.

But one factor that seems increasingly undeniable is the Bush administration’s belief that Hispanics were “natural Republicans” and that the best way to get them into the fold was to give them a stake in the “ownership society” through various housing subsidies.

Hispanics’ increasing numbers in the so-called “sand states” had a lot to do with the bubble’s disproportionate influence in those regions, and these subprime borrowers’ low levels of human capital and earnings eventually led to the music stopping as payments were unmade and new borrowers could not materialize to prop up the inflated housing prices.
I mean, throughout the boom, no one said, “Does it make sense a sheetrocker from Chiapas making $11/hour can afford a $400K McMansion in Anaheim?”
This is what may be called an “overdetermined” event. In other words, without large levels of Hispanic immigration and Bush’s obsession with cultivating Hispanic political support, the bubble may still have happened. But it seems unlikely that it scale would have been quite so huge and the wave of defaults quite so numerous in the absence of the low-skill Hispanic immigration wave the U.S. has undergone since the 1986 amnesty. A million people per year is a lot of people.

As the chart above shows, subprime lending tripled in the boom and the bulk of that expansion was increasing lending to blacks and Hispanics. Even more important, as shown in the second chart, blacks and Hispanics–according to the Boston Fed–have default rates nearly two times higher than white subprime borrowers.

Of course, the media, the Democrats, and the Republicans don’t want to discuss such things; it’s not considered polite, and, thus, the greatest demographic and social change of the United States since the Civil Rights movement is thoroughly and deliberately under-analyzed and misunderstood by well-meaning (and not-so-well-meaning) political elites.

All States Household Size By Race

September 12, 2006

Per Census Bureau data, Hispanic households are about 1.4 times the size of the average US household.

Majority of the immigrants of the last few years are of hispanic origin.

Due to bigger sizes, housing units fewer than the US Average are required to house them. Fewer by a factor of 1.4.

Following Table based on 2000 Census Data Obtained from the Census Bureau.

State Average White Black Asian Hispanic
UNITED STATES 2.592.432.743.113.62
District of Columbia2.161.752.341.992.98
State Average White Black Asian Hispanic
New Hampshire2.532.522.672.843.14
New Jersey2.682.512.803.243.45
New Mexico2.632.292.612.752.97
New York2.612.422.753.133.29
North Carolina2.492.382.653.103.87
North Dakota2.412.372.702.622.97
State Average White Black Asian Hispanic
Rhode Island2.472.372.713.183.42
South Carolina2.532.402.782.893.51
South Dakota2.502.422.752.803.13
West Virginia2.402.402.352.502.62
Puerto Rico2.982.733.083.042.99

Historical populations
Census Pop.
1790 3,929,214
1800 5,236,631
1810 7,239,881
1820 9,638,453
1830 12,866,020
1840 17,069,453
1850 23,191,876
1860 31,443,321
1870 38,558,371
1880 49,371,340
1890 62,979,766
1900 76,212,168
1910 92,228,496
1920 106,021,537
1930 123,202,624
1940 132,164,569
1950 151,325,798
1960 179,323,175
1970 203,211,926
1980 226,545,805
1990 248,709,873
2000 281,421,906
2010 308,745,538

Obama tackles immigration reform to woo Hispanics for 2012
Napolitano defends ICE immigration memo (June 28, 2011)
Department of Homeland Security Secretary Janet Napolitano rebuffed accusations from Republican senators that the Obama administration is attempting to bypass Congress to secretly allow young illegal immigrants to stay in the country.

June 1, 2013

The rebel against the controlled world

By Jon Rappoport, Infowars.com
May 30, 2013

The campaign and attack against the individual takes many forms.

In 2012, I was contacted by a disillusioned psychiatrist who had “left the field.” He told me he was interested in discussing his experiences.

Here is a key remark he made in our conversation:
“Is there a normal state of mind? The answer is no. There is the ability to deal with the reality of the world, which is a very important skill. But state of mind is another matter entirely. You could have a million people who can deal with the world, and they’re all operating in different states of mind. There is no ‘normal’.

‘Normal’ is a modern myth that has no benefits—except to the people who invented it and control it. If you can control ‘normal’ and disseminate it broadly, slip it into consciousness, you have power. It’s like one of those steamrollers. You flatten people.”
There is no ‘normal’ state of mind. It’s a myth.

It’s sold.

The professional definitions of normal are supposed to create a uniform standard of thought and behavior. A collectivism.

Coming in from another vector, we have sociologists and anthropologists, practitioners of a fake science to rival psychiatry in promoting a climate of pseudo-babble.

One of the founders of sociology, Emile Durkheim (1858-1917), coined the phrase “collective consciousness.” Durkheim insisted there were “inherent” qualities that existed in society apart from individuals. Exposing his own absurd theory, he went so far as to claim suicide was one of those qualities, as if the “phenomenon” were present beyond any individual choice to end life. He wrote:
“Man is the more vulnerable to self-destruction the more he is detached from any collectivity, that is to say, the more he lives as an egoist.”
In other words, according to Burkheim, the individual who rejects the norms of society must be wrapped up in himself in some morally repugnant way. There are no other alternatives.

In his book, The Division of Labor, Burkheim spun moral conscience in the following fashion:
“…Make yourself usefully fulfill a determinate function.” 
He cited this as a kind of command issued by collective consciousness. If this sounds Marxian, and if it sounds like the presentation of the individual human as machine-cog, it is.

From the mud of sociology’s beginnings, the long sordid history of the academic discipline brings us to something like this. Peter Callero, of the department of sociology, Western Oregon University, has penned a paper titled: The Myth of Individualism:
“Most people today believe that an individual is a person with an independent and distinct identification. This, however, is a myth.”
By some mistake, Callero’s memo never reached me. For example, I’m under the impression that I’m sitting here writing these words. Apparently not. A collection or group is doing the job. Where are they?

Maybe they’re hiding under my desk or floating in the air of my room like invisible wraiths. Maybe they’re off in the Amazon annoying a tribe of hunters, shooting videos of their “daily customs and practices.”

Sociology and anthropology have established themselves as serious “social sciences.” That means professional journals, university courses, endowed chairs, conferences, links to foundations and governments, task forces designing optimum futures.

The practitioners of these fake endeavors are dupes and agents in a massive psyop, whose purpose is the deleting of the independent individual.

Collectivism is the replacement.

All their hypotheses start with a consideration of the group as the prime element of existence.

The psychiatric State operates hand-in-glove with sociology, in the sense that it promotes some 300 officially certified mental disorders that are the same in all people. Psychiatry is a collectivism of the mind.

I’ve established, in many articles, that psychiatric diagnosis is a complete fraud. There are no physical tests of any kind for any so-called disorder.

The 20th century saw the rise of systems-thinkers, who applied their ideas to society as a whole. They gained power because global elites were pushing forward a systems-program of their own: planetary management.

The Globalist program was (and is) all about central planning and distribution of goods and services, under the cynical rubric of “greatest good for the greatest number.” This is collectivism, plain and simple. It camouflages a leading prow of brute force, Soviet style, with more subtle forms of brutality.

Universities serve as mind-control factories, turning out graduates who only see the sunshine propaganda of group harmony.

Capitalism and socialism have sex, procreate, and their child is Globalism. It contains elements of both parents. The capitalism of the father is, however, is not about the free market. It’s founded in the crime of controlling the means of production, when what is produced (out of thin air) is money.

The Federal Reserve, along with other private international banking institutions, invent money at their discretion and profit from that invention. They give and they take. They expand economies and contract them. They create booms and busts. They bankrupt nations, as a prelude to asserting the only solution is a de facto single global nation.

At the same time, the fortunes of the old captains of industry have been diverted into foundations, which are run by men who were the diabolical spawn of the parents mentioned above.

These foundations (Ford, Carnegie, Rockefeller, etc.) are devoted to funding projects, both intellectual and material, which promote and expand collectivism.

The independent individual is seen as a barrier to these operations.

He must go.

As always, the men who run this planet have put in place “the solution to their own problem.” They understand that their schemes will raise resistance, and so they’ve devised the favored form of that resistance.

It’s false unity.

They bankroll groups and projects that seek to overturn the march toward a fascist world order. These groups offer, instead, their own form of collectivism, under the flag of “cooperation.”
“If we all cooperate and come together, we can stop the spread of the evil empire. If we join hands around the world, we’ll attain social justice for all. If we see ourselves as One, instead of as individuals, we’ll emerge victorious.”
Naturally, this op causes considerable confusion. People want to cooperate. They want to do good. They want to join together. But when the means to make it happen are simply diversions from true resistance, we have a bait and switch.

And the target is still the free, independent, and powerful individual.

Occupy Wall Street was an example of a budding movement that went nowhere. It was co-opted by, of all people, the staff of the White House, who encouraged it, while at the same time carrying on their usual incestuous partnership with Wall Street.

The Big Sleep coming at the global population from a number of vectors is couched in terms of collective unity. The sign of waking up is a demand for individual freedom. And then, taking that freedom without waiting for permission.

The rebel is forged in any of a thousand different fires of mad controlling authority. That’s where he is born. He knows, in his bones, what these authorities are demanding of him: surrender.

He knows this in an unshakable core of his being.

He can spot the collective that asks for that surrender from a mile off. It approaches, these days, with a glazed friendly smile, produced out of thousands of hours of market research.

The rebel isn’t trying to produce a better overarching system. He isn’t falling for that one.

He knows that within him, the potential for creation is extraordinary. He doesn’t complain about a lack of answers. He invents them. He exposes arbitrary authority as an insane form of theater, more surreal than surreal.

He does this for his own sake, and then to wake others up.

Compromising his freedom to attain valuable goals isn’t on his list of things to do.

He knows the bait and switch.

He doesn’t need a mythical place where everyone comes together.

Like any fairy tale, myth, legend, story, collectivism began as the idea in the mind of one person. Somewhere in the mists of the past, that person dreamed it up. It was his notion. It was his perverse “work of art.”

He sold it to his friends as a way they could control the mass, the populace, the audience. He said,
“Do you see how this works? We can subscribe to the most wonderful sentiments, we can appear to be servants of the Good, we can hide behind all that while we destroy freedom. It’s a winner.”
Collectivism isn’t a mass outpouring of share and care. It’s coming down from the top of the ladder.

The rebel understands these things. He knows someone, somewhere, cooked up the whole idea and promoted it, like flatware or recliner chairs or rhinestones.

In 1934, Smedley Butler became a rebel. He was the highest ranking general in the US Marine Corps. He’d been awarded two Medals of Honor. Approached by a group of corporate leaders to put together his own army, march on Washington, and dethrone Franklin Roosevelt, Butler pretended to go along with the plan, then exposed it.

Here are two of his more famous statements:
“Like all the members of the military profession, I never had a thought of my own until I left the service. My mental faculties remained in suspended animation while I obeyed the orders of higher-ups. This is typical with everyone in the military service.”
Butler’s second statement was published by Common Sense, a socialist newspaper, in 1935. The newspaper failed to realize that Butler’s derogatory references to capitalism applied to a specific kind of theft and murder, practiced by corporate men who ultimately intended to destroy whatever was left of the free market and, then, own all markets—State Corporatism, Globalism. Socialism.
“I spent 33 years and four months in active military service and during that period I spent most of my time as a high class muscle man for Big Business, for Wall Street and the bankers.
In short, I was a racketeer, a gangster for capitalism.
I helped make Mexico and especially Tampico safe for American oil interests in 1914.
I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in.
I helped in the raping of half a dozen Central American republics for the benefit of Wall Street.
I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902-1912.
I brought light to the Dominican Republic for the American sugar interests in 1916.
I helped make Honduras right for the American fruit companies in 1903.
In China in 1927 I helped see to it that Standard Oil went on its way unmolested.
Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents.”
Butler’s rebellion was actually against the elite capitalists who came to support socialism as the method for securing and expanding their wealth and power.

That’s the turnaround that many people miss, especially those who are dewy-eyed about what collectivism promises.

The rebel is able to defend himself against delusion all the way into the core of his own mind. He discovers and invents his own reality, and he doesn’t suppose that any other human being has to agree to the contents of that reality.

Oscar Wilde said: 
“Art is individualism, and individualism is a disturbing and disintegrating force. There lies its immense value. For what it seeks to disturb is monotony of type, slavery of custom, tyranny of habit, and the reduction of man to the level of a machine.”
Nevertheless, Wilde was a socialist. He labored under the puerile delusion that private property could be abolished, thereby freeing all people from the need to slave for a living. In this way, he urged, everyone would have the necessary leisure to pursue art.

Collectivism leading to freedom of the individual. How quaint.
The real strategy of collectivism is the squashing of the mind, making it into a center of passivity and obedience, bereft of any original thought. When all people share the same imposed reality, there is no reality at all. The mind then stands only symbolically, like a black tree that has been dead for years.

To the degree it ever existed, the principle of the individual determining his own reality is being lost. What’s replacing it is the idea that “common ground” comes first and last This means doctrine. This means operant conditioning in schools. This means a Holism that preaches delusional unity.

The anthropomorphic religious diddle called Gaia has ascended. The idea of humble devotion to Mother Earth is a fool’s errand.

As George Carlin put it: 
“The planet has been through a lot worse than us. Been through earthquakes, volcanoes, plate tectonics, continental drift, solar flares, sun spots, magnetic storms, the magnetic reversal of the poles … hundreds of thousands of years of bombardment by comets and asteroids and meteors, worldwide floods, tidal waves, worldwide fires, erosion, cosmic rays, recurring ice ages … And we think some plastic bags and some aluminum cans are going to make a difference?”
It’s one thing to keep the environment healthy. It’s quite another thing to worship it and feel anxious about its future. Humans aren’t going to destroy the Earth.

But humans may end up submitting to a level of brainwashing that rivals the all-encompassing mind control of the Mayans. Humans may forget how to rebel. Humans may accept the loss of freedom as a minor bump on the road to promised salvation in the arms of “the wise ones.”

The Reality Manufacturing Company turns out its product every day. It strives to improve its sales pitch and televised fabrications. It deploys talent spotters to enlist the best and the brightest in its research divisions. It invests considerable time and money in diversionary scandals and their subsequent exposure by way of the limited hangout:
“Yes, mistakes were made. A few heads will roll. These people, who were supposed to serve the public good, wandered off course, and we promise to make every effort to see that this doesn’t happen again.”

“Do you want to be normal? Buy our product. You’ll never feel so welcomed, so accepted. You’ll resonate with all other minds. You’ll ascend to the highest point of the collective star. Be the first on your block to sign up for the future.”
This is the way the world ends. Not with a bang, not with a whimper, but with a heavily armed, surveilled Disneyland. Everyone takes the same rides and eats the same cotton candy. In this cartoon called reality, whoever declines and defects is reeducated.

The list of functioning conspiracies in our time period is very long. But the conspiracy of conspiracies is systemic. It is the action of the non-rebel, who shapes his own mind as a receptacle, inviting in any philosophy that suggests interconnected zeroes.

This is a mind where any thought or idea is automatically stripped of meaning and then hooked up to another such zero, and the whole apparatus is networked for ceaseless motion.

It is, in fact, a mirror of collectivism which, similarly, insists on an intimate relationship among all persons, who have themselves been emptied of individuality.

The rebel says no. And he means it.

Jon Rappoport

The author of two explosive collections, THE MATRIX REVEALED and EXIT FROM THE MATRIX, Jon was a candidate for a US Congressional seat in the 29thDistrict of California. Nominated for a Pulitzer Prize, he has worked as an investigative reporter for 30 years, writing articles on politics, medicine, and health for CBS Healthwatch, LA Weekly, Spin Magazine, Stern, and other newspapers and magazines in the US and Europe. Jon has delivered lectures and seminars on global politics, health, logic, and creative power to audiences around the world. You can sign up for his free emails at www.nomorefakenews.com
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