Whence the housing bust

Who caused it? Peter Schweizer's new book has the story:

The study discovered that the most significant determinant of the rate of foreclosure was the "immigrant share of the population" and the "native-born Hispanic homeownership rate." An analysis by the New York Times (one of the few media outlets who have picked up this story) echoed those findings. The paper discovered that in areas where default rates are at least double the national average, 85% of the neighborhoods are majority black and Latino. Minority mortgage holders had a foreclosure rate three and a half times higher than the national average.

This reality gives us evidence to find out who got us into this mess in the first place: housing activities and government officials who pushed for and got an aggressive affirmative-action lending program for home mortgages.

The idea sounds appealing enough: encourage homeownership in order to reduce crime, unemployment, and broken families. But activities pushed their agenda by demanding that lending institutions loosen their lending standards and look the other way when lending to people with bad credit. Activist groups such as ACORN, the Congressional Black Caucus, and the Service Employees International Union pushed banks to use "less traditional income sources such as food stamps, unemployment, part-time jobs, non-court ordered child support and foster care payments" while considering a mortgage application.