Are Minorities Responsible For The Subprime Crisis?


By golly, it’s those low-income minorities! Those values have plummeted because borrowers are defaulting on their mortgages at much higher rates — a trend that will likely worsen as the real estate bubble deflates.
At the center of the controversy are subprime mortgages, which are issued to borrowers deemed more risky than usual. Minorities did receive disproportionate percentages of subprime loans. Blacks make up 10 percent of home borrowers but account for 19 percent of subprime loans, according to a report cited in the New York Times. Hispanics make up 14 percent of borrowers but account for 20 percent of subprime loans.
As bad as the losses may be on the defaulted mortgages themselves, the losses on the securities made up of these mortgages are frighteningly catastrophic. Leverage is what financial geniuses call borrowing to buy securities or other assets. We are suffering now not simply because people are defaulting on their mortgages. Two final points about minorities and mortgages: Government studies and independent analyses have shown that a shockingly high number of prime-qualified minority borrowers are steered toward higher-cost loans.

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (, he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
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