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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#30929 Post contents: I think it's worse than a Ponzi scheme. It's just a theft (or a government-sponsored risk-free speculation). Here is how it works. A Mexican "immigrant" buys a home with 0% down, backed by FHA. (Just last year, FHA required a 5% down on "qualified" home mortgages without PMI, but provided the borrower with an additional loan for half of the down payment, and allowed him to borrow the remaining half from elsewhere.) After two years, if the prices of homes went up, he sells his home and cashes the "profit", usually in the range of $ 100,000's, from the pocket of the next buyer. (I know several cases in this scenario.) If, however, the prices go down then he walks away from the loan and FHA (the taxpayers, that is) foots the bill. I strongly believe that all government workers that were participating in this rip-off should be tried and jailed. I hope they will, one day. Sent at: 2008 12 02