Your Email:

Subject:

Message:
Entry: The Diversity Recession, or How Affirmative Action Helped Cause the Housing Crisis Link: http://www.takimag.com/site/article/the_diversity_recession_or_how_affirmative_action_helped_cause_the_housing#30665 Post contents: <i>Hack politicians threatened law suits and other bad things to banks and gave away other people’s money to a pushy constituency. The banks, under threat of lawsuit, complied. </i> The government did not have to do anything to promote lending to minorities. The banks started to lend to minorities when they ran out of better people to lend to, and they kept doing it until they couldn't sell their loans anymore. They could sell their crap because the rating agencies didn't do their job in properly evaluating the securities made from those loans. The government did not tell the rating agencies to look the other way cause they were minority loans, the rating agencies were just lazy/in collusion. Everything had a simple short-term profit motive. Other than keeping the interest rate stupid-low, the government had little to do with this bubble. And, of course, lots of white people took out stupid stupid loans. Look at this graph: http://www.irvinehousingblog.com/wp-content/uploads/2007/04/adjustable-rate-mortgage-reset-schedule.jpg See how the first people to get their interest rate reset (= game over) are the subprimers? See how the second wave is alt-a, primes, option ARMS, i.e., white people? See how much more pain is yet to come? Sent at: 2008 12 01