But it was the Clinton administration, obsessed with multiculturalism, that dictated where mortgage lenders could lend, and originally helped create the market for the high-risk subprime loans (translation: loans to minorities) now infecting like a retrovirus the balance sheets of many of Wall Street's most revered institutions.
Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making. It was either that or face stiff government penalties.
Market failure? Hardly. Once again, this crisis has government's fingerprints all over it.
Of course the author of the article fails to note that this practice mutated under the Bush regime to the extent that illegal aliens are now given home loans.
from a 2003 article at Vdare.com,
The American dream of home ownership, complete with the white picket fence, is alive and well for those who break our laws and break down our fences to get in.
Last week, the Washington Post published a rosy front-page tale headlined, "Illegal Immigrants Buy Into Homeowning Dream." [by Nurith C. Aizenman, August 18, 2003]. The article detailed how illegal aliens in the Washington DC area are successfully hooking up with cunning mortgage brokers and complicit lenders to secure home loans. Despite federal laws making it illegal to violate the borders, overstay visas, and recruit, harbor, and encourage illegal aliens, the Post notes that the illegal alien home loan schemes are "legal."
The Post's heart-warming story began:
"Gerardo Cabrera fell in love with the house immediately. There was the bay window in the living room, the fireplace in the den, and — most enchanting to a man raised amid the concrete of Mexico City — the woods in the back yard. And so the auto mechanic and his wife, a secretary, decided to pay $200,000 for their own piece of suburban Gaithersburg, a classic tale of immigrants achieving the American dream. Except for one detail: At the time, they were in the United States illegally."
While law-abiding homebuyers must supply airtight proof of identity, legal residence, and a Social Security number to lenders, illegal alien purchasers such as Cabrera (a visa overstayer who recently received a green card) need only supply a "taxpayer identification number" (TIN) issued by the Internal Revenue Service.
No criminal background check is required before applying for a TIN, which many banks now accept from illegal alien customers as a primary form of identification.
Cabrera's broker, Alma Preciado of Metropolitan Financial Services in Silver Spring [email her], told the Post that about 10 percent of her mainly Latino clientele qualify for home loans using a TIN instead of a Social Security number.
That's just the tip of the illegal alien homeowners' iceberg. The Post failed to note that Federal Housing Administration-approved loans through the U.S. Department of Housing and Urban Development do not require lenders to obtain prove of citizenship or legal permanent residence. [VDARE.COM gloat: we broke this story in January 2002!] These FHA/HUD programs, primarily targeting minorities and first-time homebuyers, are federally insured and require minimal down payments.
A 25-year veteran of the mortgage industry in California confided to me recently:
"It boggles the mind to think how many illegal aliens are homeowners in this country thanks to these programs, all fully insured by our government. Because of fear of lawsuits for discrimination I can also tell you that a lender may have a borrower who speaks little or no English who claims to be either a citizen or resident alien and it will not be questioned nor any proof required. Since FHA does not require any such documentation, a lender cannot cite their regulations as a basis for the request as they can on conventional loans."
And of course you can imagine how this will continue to play out as America's already extremely bloated population grows by another 135 million people within the next 34 years.