Something I've noticed over and over is that the NYC-DC based punditocracy doesn't really believe that there are 47 million Hispanics in the U.S. (Hey, you never meet any at the dinner parties we attend ...) Black people, yes, they see them on TV singing or carrying the football, they're always seeing PBS specials on the civil rights movment, so, yes, they very much believe in the existence of blacks.
But Hispanics are virtually invisible to important news media people in America. They see them when they visit Santa Fe, but otherwise, they don't occupy any space in their mental universe.
So, in the media mind, mortgage defaults by minorities can't possibly play an important role because, well, a minority is less than a majority, so therefore it can't be of any significance.
All the evidence I've seen, however, suggests that defaults by Non-Asian Minorities (NAMs) played a big role in precipitating the current crisis. But, I haven't yet seen anybody calculate a single number estimate of the size of that role. What we are really looking for is the share of all mortgage defaults, both by number and by dollar value, by NAMs. Foreclosures would be a reasonable proxy for defaults, although subprime share might not be.
To be even more accurate, we should look for the incremental defaults, above the usual expected baseline default rate. (Normally, lenders expect a small single digit percentage of defaults per year due to sad events and they plan for that rate. What's causing this wipeout is the higher than expected rate.)
Below is a trove of information posted by a commenter named david. Perhaps a reader could go through the links and figure out what that share is.
Some statistics on non-white delinquency and defaults across all mortgage grades and loan types would be interesting to see.
Don't know if this will help you, but below I copied and cleaned up a recent (9/22) comment by an Anonymous.
Below each hyperlink is a juicy excerpt or preview therefrom.
Someone said, "My criticism of your VDare piece is it implies that minorities are more likely to default on their loans. This is probably true. Please show the statistics to back it up. My second criticism is that the dollar value of losses may not be disproportionally [sic] minority caused."
See cites below. They show:
a) Default rate is higher among minorities; and
b) Minorities are more likely to have subprime loans even at higher income levels. (Reason: income is not a perfect proxy for IQ, and high-income minorities are very disproportionately affirmative action recipients. See the regression to the mean in Prince George's County.)
"What insurers aren't allowed to do is discriminate based on race, no matter how actuarially sound their arguments. Blacks, for example, have shorter life expectancies on average than whites, but companies aren't allowed to charge black customers more for life insurance."
"Urban, Minority Foreclosures on the rise"
"A similar pattern can be seen in Chicago, where foreclosure filings tripled, to 7,576, from 1993 to 2005. Neighborhoods where the population is more than 80 percent non-white account for 65 percent of all cases, up from 61 percent in 1993, according to data compiled by the National Training and Information Center, a housing advocacy and research group based in Chicago. The same trends have been documented in Atlanta and Philadelphia, according to researchers from Harvard and the Reinvestment Fund, a Philadelphia-based investment organization hired by the Pennsylvania Department of Banking to study mortgage foreclosures in the state."
"The 10 neighborhoods with the highest rates of mortgages from subprime lenders had black and Hispanic majorities, and the 10 areas with the lowest rates were mainly non-Hispanic white.
"...the rate of subprime lending is far higher for minorities than for whites even at higher income levels. For example, 24 percent of non-Hispanic white borrowers earning $125,000 to $150,000 took out a subprime mortgage in 2006, compared with 52 percent of Hispanics and 63 percent of non-Hispanic blacks in the same income range."
"July 13, 2007--The National Association for the Advancement of Colored People stepped into the fight against subprime lending Wednesday when it sued 12 national mortgage-lending companies for discriminatory practices."
"But Hispanics and African-Americans were far more likely to leverage the American dream with subprime loans — higher-cost products for buyers with impaired credit — that are now going bad at an alarming rate.
"About 46% of Hispanics and 55% of blacks who took out purchase mortgages in 2005 got higher-cost loans, compared with about 17% of whites and Asians, according to Federal Reserve data. The South Side of Chicago, with a large concentration of minority borrowers, has a high concentration of subprime loans and the state's highest foreclosure rate. In Boston, where defaults are rising — especially in minority areas — 73% of high-income black buyers (those making $92,000 to $152,000) and 70% of high-income Hispanics had subprime loans in 2005, compared with 17% of whites.
"...Recent immigrants lack credit histories, and 35% of Latino families don't have checking accounts. Hispanic families are more apt to have undocumented income, leading them to lenders who make loans without income verification, according to the National Council of La Raza.[...]
"Another reason for the subprime surge: Lenders have been supported by politicians and community leaders eager to promote minority homeownership, which remains about 25 percentage points below that of white non-Hispanics.
"'Access became such a buzzword that people forgot about basic lending practices,' says Keith Corbett, executive vice president of the Center for Responsible Lending. 'You are really in debt servitude, having a loan with a loan-to-value ratio of 100% or greater.'"
"High-cost subprime mortgages have often been framed as loans that catered to people with blemished credit records or little experience with debt.
"There has been less attention paid to the concentration of these loans in neighborhoods that are largely black, Hispanic, or both. This pattern, documented in federal loan records, holds true even when comparing white middle-income or upper-income neighborhoods with similar minority ones."
"The Joint Center for Political and Economic Studies reports that the rate of subprime mortgages for Latinos and African Americans is about double the rate for whites. In 2006, subprimes made up one in four mortgages (26 percent) made to whites, 47 percent of those to Latinos and 53 percent of mortgages that went to African Americans."
"Illegal immigrants were able to buy U.S. homes during the boom years, either by showing evidence that they pay taxes or by simply presenting false documents. Many of them took out high interest fixed-rate loans or subprime mortgages with a low entry rate that later rose sharply."
"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."
"In a world devoid of lending discrimination, therefore, minority mortgage holders as a group will tend to have higher default rates than the pool of white mortgage holders."
"Austan Goolsbee: Also, the historical evidence suggests that cracking down on new mortgages may hit exactly the wrong people. As Professor Rosen explains, 'The main thing that innovations in the mortgage market have done over the past 30 years is to let in the excluded: the young, the discriminated against, the people without a lot of money in the bank to use for a down payment.' It has allowed them access to mortgages whereas lenders would have once just turned them away.
"The Center for Responsible Lending estimated that in 2005, a majority of home loans to African-Americans and 40 percent of home loans to Hispanics were subprime loans. The existence and spread of subprime lending helps explain the drastic growth of homeownership for these same groups. Since 1995, for example, the number of African-American households has risen by about 20 percent, but the number of African-American homeowners has risen almost twice that rate, by about 35 percent. For Hispanics, the number of households is up about 45 percent and the number of homeowning households is up by almost 70 percent."
"Obama, Like Dodd and Conrad, Got Cheap Home Loan
"Wednesday, July 2, 2008 10:36 AM
"By: Rick Pedraza
"Presidential nominee Barack Obama joins the list of several other high-profile Democratic Party members who received highly favorable home loans.
"Obama, D-Ill., reportedly purchased a $1.65 million mansion in Chicago through a 'super, super jumbo' loan he received from Northern Trust Bank in Illinois, the Washington Post reports.
"The portion of the money financed through the lender ($1.32 million) was offered to the Obamas at an unusually low discount interest rate locked in at 5.625 percent over the life of the 30-year fixed-rate loan, which was below the average of what a typical Chicagoan pursuing a similar low loan rate received at the time.
"For his part, Obama and his camp are defending the lower rate as lender competition for business. A spokesman for the camp says, 'The Obamas have since had as much as $3 million invested through Northern Trust.'
"Obama joins Sen. Chris Dodd, D-Conn., and Sen. Kent Conrad, D-N.D., on the list of high-profile public figures who received 'VIP' loans that some now are scrutinizing as alleged trade-offs for political favors.
"According to a report released last month by Condé Nast, Dodd received highly favorable loans under the designation, 'Friend of Angelo,' a reference to embattled Countrywide Financial Corp. head Angelo Mozilo.
"Dodd, who chairs the Senate Banking Committee, received loans from Countrywide that reportedly saved him tens of thousands of dollars.
"Conrad also has been named as a recipient of special-consideration loans from the beleaguered lender.
"Countrywide is the same bank involved in the loan scandal that caused Obama's vice presidential Vetting Team Chief James Johnson to resign amid criticism over his personal loan deals with the lender.
"Other high-ranking political officials involved in questionable 'VIP' home loans include former Secretary of Housing and Urban Development Alphonso Jackson, former Secretary of Health and Human Services Donna Shalala, and former U.N. ambassador and assistant Secretary of State Richard Holbrooke, Condé Nast reports."
Have a nice day, eh.