Looking back at the mortgage mess

I wrote this in April 2007. The mortgage and credit mess has expanded and spread. But this is all still true. Particularly note the problem the "access" mentality and "gap" concern brought to our economic health. This fascination with disparities, and not good health practices and results, is behind the push for universal health care.
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Minorities hit hard by subprime loans
is the headline of USAToday's latest article on how the poor and minorities are victimized in the U.S.A. It really makes you wonder if the journalists learned anything else in college! A closer look at the middle paragraphs:

• Minority home buyers helped fuel the housing boom--49% of the increase between 1995-2005. [Note that this trend of "empowering" minorities by burdening them with impossible debt began under Clinton, and any attempt to reverse it has brought condemnation on Bush.]
• 73% of high income ($92,000-$152,000) blacks and 70% of high income Hispanics had subprime loans, compared to 17% whites.
• Lenders were supported by politicians and "community leaders" eager to promote minority home ownership.
• When Illinois (Cook Co.) tried to establish credit counseling programs for new minority buyers by targeting ZIP codes, the program was pulled as being "racist".
• Access became a buzz word at the expense of sound lending policies.
• Buyers/borrowers with poor credit or low salaries who wanted a cheap deal are a large part of the problem.
• Investigation by a counseling group found 9% of those in trouble were victims of fraud; the rest was poor judgement and poor financial skills.
• Rather than focus on the borrowers' poor financial skills, it appears that new regulations and programs will pounce on predatory lenders.
• Government investigations of charges even before the current problem came to light showed a "good chunk" [not my term] of higher loan cost is attributed to borrower's income, not to race or ethnicity.

But this is America, where nothing happens if it isn't about poverty, race, gender or disability.

No one wants to be reminded, but here's what it took in 1968 to get a home mortgage (our third home): the monthly PMI didn't exceed one-third of the husband's income; there were married parents/in-laws to chip in on the down payment to help a young couple; most mortgages were for 20 years; typical mortgage rate was around 6.5%; the average home and what owners expected was smaller and less grand; a typical applicant for a mortgage wasn't also paying for a leased a car, or a cable bill, monthly broadband, or a cell phone bill, nor did they eat out 2 or 3 times a week and take vacations at resort spots.

Yes, I know it sounds terribly fusty and old fashioned back in the old days when the state and federal governments weren't our foster parents, overseers and field bosses, but that's just how it was.