Friday, July 5, 2013

The Great Housing Game

Steve Sailer has a very good dissertation on one of the uncomfortable truths of the mortgage meltdown, that minorities were disproportionately given home loans they did not qualify for through subprime ARMs, and when rates blew up so did the housing market.  The actual link to the report itself is here, and it gets into detail about how government pushing more minority home loans helped blow up the bubble and led to unqualified applicants getting loans.

I've been in the process of trying to buy a home since about February now.  We're on our third attempt to buy, and seeing the hurdles involved makes me wonder how the hell they're talking about certain cities (including Phoenix) blowing up another bubble. Our original home loan was through Wells Fargo, who decided after sixty three days that they didn't want to extend us a home loan and left us hanging.  Throughout the entire process, I never got the feeling that they wanted to extend us the loan, but were going through the motions.

It was a nonstop request for documents, explanations about this or that, and demanding the most abstract paperwork I can think of to finance a $92K purchase.  I have to wonder what the hell we 'bailed out' these banks for if they just want to borrow money at the federal trough and sit on it to make more money, instead of lending it out for home loans.  I guess I just find it amazing how gardeners and day laborers were given $400K loans and now the pendulum has swung so far the other way that its nearly impossible to get a home loan.

The idea of minority home borrowers began with Clinton, but Bush the Younger doubled down on the idea of 'ownership society' and got rid of "the racist concept of down payments', to paraphrase Steve Sailer.  There were also incentives to loan agencies to push more minority borrowers, which led to more and more unqualified applicants showing up in the system.  This link here to VDare goes on at length about minority home ownership and how 'race neutral' lending practices, enshrined in law under the Equal Credit Opportunity Act (among others) blew up the bubble and implicity encouraged lenders to make risky loans because....equality!

So I reckon that this is part of the reason that I'm jumping through hoops to purchase a home, but this time around its much easier.  I'm going through a mortgage company and using a realtor, which is so worth it this time around.  Having someone competent in your corner really takes the stress factor off when you're juggling forms and trying to get things done.  I'm quite happy with the work she's been doing, and thankful for it as well.

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