Mortgages More Elusive for Some Minorities
A new study by the Furman Center for Real Estate & Urban Policy finds that mortgages fell 14 percent last year, but impacted communities very differently. For black and Hispanic home buyers, the number of mortgages dipped 44% and 34% respectively, while mortgages for white buyers barely fell at all. Asian buyers, on the other…
A new study by the Furman Center for Real Estate & Urban Policy finds that mortgages fell 14 percent last year, but impacted communities very differently. For black and Hispanic home buyers, the number of mortgages dipped 44% and 34% respectively, while mortgages for white buyers barely fell at all. Asian buyers, on the other hand, had six percent more loans. “As a result, the racial breakdown of home buyers in New York City changed significantly during the period studied, which predated the financial turmoil in the markets this year,” writes the NY Times. The shift isn’t entirely because of the sub-prime mortgage meltdown, says the NY Daily News (the Times says the opposite); prime loans have fallen for minority groups as well. The Times says one primary reason for the decline is fewer applications, but that’s not city-wide: mortgages fell in every borough but Manhattan, where they increased 12%. Even so, we’re doing better than the rest of the country, where mortgages dropped 25 percent on average.
Fewer Mortgages for Blacks and Hispanics [NY Times]
Minorities Hard Hit in Mortgage Crunch [NY Daily News]
Photo by wmliu.
All the way it used to be lechacal!!! Many first time home buyers over the past 5-6 years have seen nothing but these rediculous mortgage products and think that’s the way it is. It isn’t. Back to some sanity in mortgage terms.
I am surprised at the staying power of irresponsible mortgage products during the crisis. A couple of observations, and Adam Dahill and Sunny Hong are of course welcome to offer a rebuttal on behalf of the mortgage brokers and mortgage bankers, respectively:
1. Any payment option product should be taken out to the back alley and shot. They are toxic waste the moment they are written.
2. If you can’t afford a 20% down payment, don’t buy. Don’t try to think of some creative way to borrow even more money so you can absolutely leverage yourself to the maximum to buy the property. It means you can’t afford it, and you shouldn’t buy it. Keep renting and save. If you don’t have the earning power and fiscal discipline to save a 20% down payment, you probably don’t have the fiscal discipline to borrow a ton of money to buy a home.
3. Non-amortizing mortgages are irresponsible. If you don’t pay down principal, you are basically a renter who takes market risk. Most people who think they have enough fiscal discipline to use interest-only products don’t. For most humans, discipline needs to be imposed from the outside (in this case, in the form of mandatory repayment of principal).
I’m interested in seeing more detail on this study. What do the data show for blacks & hispanics in Manhattan as opposed to the other Boroughs. Unfortunately the data isn’t available in the study for a real fine tuned analysis…as always, just the broad strokes.
the gov’t bailout plan will work the same way the photo worked in this thread.
I know whats wrong with this photo – it is too similar to the photo in the story below.
“We are being nitpicky today.”
ditto, do you mean as opposed to being our usual noncritical, forgiving and understanding selves?
the photo earns a c+ grade. how about faces of the schmucks that got us all into this crisis.
We are being nitpicky today. At least your headline is more accurate than the the NYDN in pointing out its not simply all minority mortagages that are down.
Yeah, I don’t like that pic either. How about something with more of an asian & latin flair to it? Also, a quick read of your paraphrased story might lead to the conclusion that this is overall mortgages where its actually data on new mortgage applications.