Hispanic Home Buying Boom?
Not sure what to make of this piece in USA Today:
Analysis finds boom in Hispanics' home buying
"Home buyers with names such as Rodriguez, Garcia and Hernandez bumped Brown, Miller and Davis down the list of most common buyers' names in 2005, reflecting Hispanics' rapid advance into the middle class."
"A DataQuick Information Systems analysis of deeds and county assessment data shows a dramatic rise in the number of Hispanic and Asian home buyers since 2000."
"Smith and Johnson remain the two most popular, but Rodriguez has replaced Brown in third. Four Hispanic names are in the top 10, compared with two in 2000."
"Hispanic surnames made up 14.6% of all home buyers' names, up from 10.3% five years earlier. "The Latino population is really integrating into the middle class — and rapidly," says John Karevoll, analyst at DataQuick, a San Diego real estate information company that scoured public records in 37 states that accounted for 91% of the USA's real estate activity."
"The changes are dramatic elsewhere, too. No Hispanic names appeared in the top five in Illinois in 2000. Now, Garcia is third and Rodriguez fifth. Nevada went from zero to three and New Jersey from one to three. "It's startling how rapid the changes are," says Dowell Myers, a housing demographer at the University of Southern California. "People assume that Latinos are poor and that they're not a factor in homeownership. They're really integrating economically.""
""When we start showing up on the top list of names, that's fabulous," says Frances Martinez Myers, chairman of the National Association of Hispanic Real Estate Professionals. "It speaks to the growing economic clout of the Hispanic community. They are willing to assimilate ... to be part of the country and to pay their way. ""
New Jersey
2000 Rank
1. Smith
2. Johnson
3. Miller
4. Brown
5. Rodriguez
2005 Rank
1. Smith
2. Rodriguez
3. Brown
4. Gonzalez
5. Garcia
Analysis finds boom in Hispanics' home buying
"Home buyers with names such as Rodriguez, Garcia and Hernandez bumped Brown, Miller and Davis down the list of most common buyers' names in 2005, reflecting Hispanics' rapid advance into the middle class."
"A DataQuick Information Systems analysis of deeds and county assessment data shows a dramatic rise in the number of Hispanic and Asian home buyers since 2000."
"Smith and Johnson remain the two most popular, but Rodriguez has replaced Brown in third. Four Hispanic names are in the top 10, compared with two in 2000."
"Hispanic surnames made up 14.6% of all home buyers' names, up from 10.3% five years earlier. "The Latino population is really integrating into the middle class — and rapidly," says John Karevoll, analyst at DataQuick, a San Diego real estate information company that scoured public records in 37 states that accounted for 91% of the USA's real estate activity."
"The changes are dramatic elsewhere, too. No Hispanic names appeared in the top five in Illinois in 2000. Now, Garcia is third and Rodriguez fifth. Nevada went from zero to three and New Jersey from one to three. "It's startling how rapid the changes are," says Dowell Myers, a housing demographer at the University of Southern California. "People assume that Latinos are poor and that they're not a factor in homeownership. They're really integrating economically.""
""When we start showing up on the top list of names, that's fabulous," says Frances Martinez Myers, chairman of the National Association of Hispanic Real Estate Professionals. "It speaks to the growing economic clout of the Hispanic community. They are willing to assimilate ... to be part of the country and to pay their way. ""
New Jersey
2000 Rank
1. Smith
2. Johnson
3. Miller
4. Brown
5. Rodriguez
2005 Rank
1. Smith
2. Rodriguez
3. Brown
4. Gonzalez
5. Garcia
43 Comments:
Strange, when I go to realtytrac and see the names of people in foreclosure I see the same ethnic trend.
Guess the banks have targeted a certain segment of the population for aggressive loans.
Watch out for this possibility. They are invisible owners. On another blog I sa this scenario explained. APparently it is happening somewhat in SoCal. That many are illegals and they buy under assumed IDs.
They have multiple people renting the place out and it is under one of the exotic loans. The loan resets or building inspectors find the overcrowding and then they can't find the owner.
Drop the insults. It discredits what I'm trying to do. Someone is going to come to this board, read that comment, and never come back.
While your point about BOA giving mortgages to TIN holders is most certainly valid, and very disturbing.
The comment about predatory lending is also on-track. Driving around Passaic and Paterson, there seem to be some very aggressive advertising. I'm sure that anything I'm say here is going to sound very derogatory. I've got a handful of hispanic acquaintances that have commented to me that a number of agents and mortgage lenders are using their common hispanic background as leverage to push buyers into risky mortgages and properties they really can't afford.
grim
oh man, this is getting a little racial no? blame the banks for this.. not an ethnic group.
Im not hispanic, but, comments like "When will hispanic mall open" are really uncalled for. No one ever makes fun of the "white man" for having Abercrombie and Fitch (actually yes they do make fun) :)
All in all, I love this board, racial comments just scare the heck out of me (call me a peace and love kinda person)
keep up the good work and sensible moderating James. Nicely done
Question...
Are all loan docs available in Spanish, or would Spanish-speaking buyers have to rely on their broker/loan folks/agent telling them what they're about?
I'm thinking the same thing as anonymous at 6:48am.
I have an aunt that works in the mortgage industry (not sure what she does...something administrative I think...she doesn't have any say in who gets a loan or anything).
Anyhow, last summer I was discussing the unaffordability factor with my above mentioned aunt when my mother started in about how house prices won't drop so I should just buy (her friend's house) now. So I launched into my usual argument with all of the logical reasons why prices could/should come down. I mentioned how people are buying houses they can't afford and how those houses will probably be in foreclosure in a few years. My mother tried to brush it off as usual, but my aunt jumped right on that...she mentioned hispanics specifically and how her company was handing out loans like candy to the hispanic community. She couldn't believe that families making a combined income of $40,000/yr were getting the amounts of money that they were getting - of course she knew about the fudging that was going on but her bosses had a strict policy that she was to keep her mouth shut and do her job without questions...I feel obligated to note that she doesn't work for that company any more.
- Cultural Infidel
There is a very fine line with helping minorities achieve homeownership and predatory lending.
It is predatory lending under the guise of "helping increase homeownership" that I'm most afraid of. Frankly, it scares the hell out of me.
It's impossible to draw any line without becoming entangled in a policital mess. Nobody is going to want to touch the issue, thus it will continue.
If someone can't afford a home, they can't afford a home. Put race, gender, background, and surname aside.
But putting someone into a property they can't afford using a risky loan and saying it is "helping minorities achieve the American dream"? It just isn't right.
But how do you speak out against it without it sounding racially motivated or insulting?
grim
Over at Another F'd Borrower:
http://www.housingbubblecasualty.com
Many people there observed a mass influx of illegal aliens and their relatives buying up large, nice homes and having 20+ people living there, all splitting the mortgage payment.
Needless to say, it wrecks the town, with cars parked all over the place, garbage everywhere, noise, people coming and going at all hours, etc.
"But how do you speak out against it without it sounding racially motivated or insulting?"
I've stopped worrying about being PC soon after 9-11, when the media and many others started to engage in Orwellian speak to avoid facing reality.
Speak reality, and let other, intellectually dishonest people worry about trying to spin reality into something "less offensive."
I think one of the great things about New Jersey is it's tight knit cultural communities. You can't drive through any part of Northern NJ without hitting one. I don't understand why anyone would think that something is wrong with this. It's a natural part of immigration and assimilation. People are going to tend to gravitate towards others that came from a similar background or speak a similar language.
I'm all for *legal* immigration. This country exists because of immigration. The Statue of Liberty actually means something to me.
I'm a first generation (born) American. The reason I'm here is because my parents were allowed to immigrate to this country.
grim
Doing an analysis on last names is ridiculous and really does not prove anything unless you are aggregating the data. So what if Lopez or Amigo is the top last name in a state for real estate sales??? If you could tell me that Hispanics bought over 10% of homes last year, then that would be meaningful and I would be impressed.
I agree with the comments on analysis, it's almost entirely meaningless sensationalism. Did you really expect much more from USA Today?
But I did think it made an interesting jumping-off point for discussions, even if they were going to be heated.
I think predatory lending to minorities is an issue that deserves to be discussed.
Richard,
The middle class is the debtor class, whether it be made up of white, black, asian or hispanic.
Here is the data from 1999, trying to find something more recent for comparison..
http://www.wnjpin.net/OneStopCareerCenter/LaborMarketInformation/lmi10/inc/mcd_inc.xls
grim
- The growth in loan volume at any cost (without regard to sound underwriting) is responsible for this wave of lending. I do not believe "hispanic" groups ever initiated a request for this kind of loans or lobbied for this to start. (ITIN loans have been in place for decades to enable rich Europeans, Japanese, South Americans and others to purchase property in the US). Such ITIN loans, subprime loans, hard money loans, stated income loans are available to anybody (with property that can be collateralized).
- I fail to see the instant connections established by some posters here. For instance - between 9/11 and hispanic homebuying. OR between hip hop music and the "third world" (Hip hop music, at least in its origins, is as american as apple pie).
- Banks (in large measure) do not "target" specific groups, they create products that they hope will help them grow. When certain communities take advantage of these products, other communities feel that the former is getting a sweet deal. When things go sour (example - foreclosures etc), the communities that initially benefited from them claim that they were "unfairly targeted". (I must hasten to add here, there are unethical banks/financial institutions that do target groups of people, but they are far fewer than the press would have you believe).
CNS
Some more data:
http://www.census.gov/prod/2005pubs/p60-229.pdf
I grew up in Jersey City. As more of the Hispanic population moved in, crime went up, the houses were not kept up as well, stereo speakers went in the windows blaring Salsa and Merengue(sp?), fine shops on Central Avenue left, and the streets got dirty. I'm just telling you what I witnessed, you draw your own conclusions.
CALABASAS, CA /PRNewswire/ -- Countrywide Home Loans, Inc., a national leader in residential finance, is ranked as the number one lender to minorities according to National Mortgage News affiliate Mortgagestats.com. Mortgagestats.com used Home Mortgage Disclosure Act (HMDA) data for 2000 to determine rankings for mortgage lenders. Countrywide led in overall minority lending with a total of $10 billion and also ranked number one in lending to Hispanics and African Americans for the same time period.
"Countrywide has been committed to the availability of affordable homeownership to all Americans since our inception more than 30 years ago," said Angelo Mozilo, chairman of Countrywide Home Loans. "We continue each year to devote our tremendous resources towards reaching out to thousands of prospective home buyers to help them understand that the dream of homeownership is within their grasp. This mission is a cornerstone of Countrywide and something I'm incredibly proud of.
"This year's data shows the results of our work. We retained our position as the number one lender of loans to African Americans and Hispanics nationwide." Overall, the company's market share among all minorities (African American, Asian, Hispanic, Native American/Alaskan) increased to 5.26 percent, totaling more than 86,000 loans in 2000.
"In addition to our focus on assisting historically underserved home buyers, we have dedicated resources to expanding and encouraging homeownership in economically depressed areas, helping to revitalize these communities with the pride of homeownership," said Mozilo.
Countrywide has consistently been a leader in opening access to mortgage credit for all sectors of American society. In 1992, Countrywide created its House America(R) program, supporting its fair lending commitment through specialized loan programs, community outreach and a nationwide home buyer counseling center. In March 2000, Countrywide became the first mortgage lender in the nation to renew with the U.S. Department of Housing and Urban Development (HUD) its Declaration of Fair Lending Principles and Practices. In doing so, the company affirmed its commitment to fair lending and set forth a series of company-wide practices aimed at increasing loans to low- to moderate-income and minority borrowers.
Mozilo credits Countrywide's record to its aggressive "We House America" campaign to help minority and lower income borrowers seek homeownership. Last year, the company reaffirmed its commitment to affordable lending with a new pledge, the One Hundred Billion Dollar Challenge, which aims to provide $100 billion in loans to lower income and minority home buyers and in lower income communities by 2005.
http://www.civilrights.org/issues/housing/details.cfm?id=42577
Coalition Calls for Predatory Lending Legislation to Protect Minority Homebuyers
Acknowledging that homeownership is the predominant avenue for accumulating wealth, the letter states that predatory lending "threatens decades of work by the civil rights community to increase minority homeownership."
Many minorities, immigrants, women, and elderly tend to have less experience with the mortgage market and are therefore more vulnerable to exploitation. For this reason, such legislation would improve protections for families looking to buy homes, ensure access to courts for victims, and guarantee access to fairly-priced credit.
Predatory lending practices usually take the form of refinanced loans with excessive fees, but can also include penalties for paying off loans early; kickbacks to brokers; loan flipping; steering borrowers into unnecessary subprime loans; and targeting vulnerable borrowers, particularly African Americans.
Most of these predatory lenders target people with bad or limited credit. Minorities, immigrants, women, elderly, and individuals who live in poverty are disproportionately represented in this population.
In the last 10 years, the subprime market has grown 1000 percent, according to the Center for Responsible Lending (CRL). CRL estimates that subprime lending increased 50 percent between 2002 and 2003 alone.
Some housing experts point out that subprime lending is essential to providing homeownership opportunities to those least likely to have them. But there is too often a downside. Wade Henderson, executive director of the Leadership Conference on Civil Rights, said, "While increased access to credit for families with impaired credit histories is to be applauded, the prevalence of subprime loans with abusive characteristics has been devastating to minority and disadvantaged communities."
Trust me, Grim - I am not blowing smoke here.
CNS
CNS,
I agree, but only up to a point. I think that many of these loans are 'enablers'.
While banks and lenders certainly aren't dumb enough to target directly (although Ameriquest just settled a $25m predatory lending suit), the reason for these mortgages is questionable. They sure do make predatory lending very easy...
My last word on this -
- I am sure you can come up with much to debate what I have said. Some of the articles that you cite are by groups who have cited "predatory lending" as an issue for decades. Some of these groups are also active in organizing the demonstrations for granting amnesty. I mention this ONLY to point out that some of them have a vested agenda.
- Predatory lending is an issue no doubt - but is largely the domain of unethical mortgage brokers or private money lenders (making subprime or hard money loans).
CNS
Ameriquest is a POS company. Not a bank.
CNS
I work for an insurance company and duplicate social security numbers used by more than one name are very common. It automatically raises a red flag as far as compensation is concerned. It is unthinkable that lenders do not verify credentials further. Those mortgage companies have really lead to this mess.
This blog purports to discuss issues as it relates to the RE bubble in NNJ. While much of the discussion is fascinating, we need to maintain perspective. Regarding the hispanic home buying boom, the pertinent questions appear to be -
- Are the hispanics buying homes in numbers that are significant enough to affect statistics in nnj ?
- Given the greater propensity of these loans being "loosely documented", will that worsen the foreclosures in the future ? Or will that the fact that the rate of employment among hispanics is higher than other groups make up for this (and actually help by keeping a lid on foreclosures) ?
Grim, Unrealtor, Metro, CF, Reinvestor, SG, pesche22 & other regulars - What would be the other pertinent points of discussion ?
CNS
"I fail to see the instant connections established by some posters here. For instance - between 9/11 and hispanic homebuying."
Sorry, there was no connection made "between 9/11 and hispanic homebuying."
There was a connection made between the Orwellian speak after 9-11, and the Orwellian speak today regarding illegal aliens.
Do try to follow along.
"Banks (in large measure) do not 'target' specific groups"
I think when you see billboards and advertising posters up in Jersey City, or Newark, written exclusively in Spanish, and advertising 1% loans, they are indeed targeting a "specific group." Which is smart business, but let's not deny what's happening.
Unrealtor,
I don't understand why you are snapping at me ? IMO - it is not so much as me not following along - but you being overly dramatic. There was no "Orwellian double-speak" in any of the blog discussions here. No one muzzled you as far as I can remember. There was little reason, IMO, for introducing topics so far from the discussion of a housing bubble in NNJ.
FWIW - I do believe that you are a very fair minded person.
CNS
ReInvestor wrote:
"Have you ever considered the ironic twist that all this immigration really represents the return of the native american to a land that was orginally his?"
It's funny how you blast others here about being "un-American" and yet here you have recited the anti-American clap-trap regurgitated by Stalinist front groups (e.g., "International ANSWER"), etc, who back these anti-American groups to undermine the United States:
http://www.mexica-movement.org/granmarcha.htm
(Triple-click to select link, scroll down for many photos.)
I don't think you're "right wing," but instead, completely uninformed.
"What would be the other pertinent points of discussion?"
Here's one: Why are our existing laws not being enforced? Using a bogus Social Security #, or the SS# of someone else, is a Federal crime (identity theft). Let's enforce the laws.
"Banks (in large measure) do not 'target' specific groups"
Actually there is to an extent because of past practices in lending where there was redlining. Especially in urban mixed race neighborhoods.
My sister worked over at Fannie Mae Foundation, undoing the barriers to homeownership is their slogan as well as their mission. She told me that regulators over the last ten years have nudged the banks to lighten up on the lending requirements.
CNS wrote:
"I don't understand why you are snapping at me?"
My apologies, I just get annoyed at the implication that if someone even mentions 9-11 as a contributing factor to a change in their perspective, that somehow means "9-11 is linked to X."
"IMO - it is not so much as me not following along - but you being overly dramatic."
I was stating a mundane personal observation in response to a question from Grim, how is that "overly dramatic"?
"There was no "Orwellian double-speak" in any of the blog discussions here."
Please re-read my post from 8:39, which you continually misrepresent. Grim asked: "But how do you speak out against it without it sounding racially motivated or insulting?"
To which I replied: don't worry about being PC, speak the truth, and let the dishonest folks worry about spinning reality into something "less offensive."
"No one muzzled you as far as I can remember."
I never implied anyone did; where are you getting all this stuff?
"There was little reason, IMO, for introducing topics so far from the discussion of a housing bubble in NNJ."
My post addressed the topic, and Grim's question, I think you may need some morning coffee?
"FWIW - I do believe that you are a very fair minded person."
Thanks, appreciate that, and you are as well (normally), but today you're misrepresenting what I've written.
I always regret posting pieces that I know are politically or emotionally charged.
I hate to think that I'm dividing readership or causing readers to leave because of these things.
As much as I love a good heated discussion or debate, lately they seem to be depreciating very quickly.
I really love the arguments we've been having lately.
So keep your head up and keep your punches clean.
- Grim - I don't see any problems with this discussion thread. There is a sufficiently broad group of regulars here who can provide the "checks and balances" needed. Everyone who has already commented - me, unrealtor, reinvestor, pesche22 - should feel free to continue discussing.
- grim_ghost - Yes, the conforming mortgage loan process is document intensive. ITIN loans fall into the spectrum of nonconforming loans (if at that. Some would argue that they are illegal). They are largely made by only a few banks (Banco Popular for instance). I believe they keep these loans in their portfolio.
- The secondary marketing aspects make a difference here. I do not believe that Fannie/Freddie are involved in this (but I could be wrong). So the banks doing ITIN loans (as a bread-and-butter product in their portfolio) are the ones who put these loans in their portfolio (and not sell these on the secondary market).
- I believe the other bigger banks trying this right now (e.g Wells etc) are largely doing this as a pilot program.
- I would think that these loans will remain a niche product, unless Fannie/Freddie begin to okay them.
CNS
ditech (or for that matter, any lender that is big on TV advertising) have large marketing costs. As a rule of thumb, these companies never have the lowest cost loans (though some might provide excellent service).
People recall their names and call them instinctively when they think of a loan. Once they make contact with a loan officer, they are usually sold hard & pressured into closing swiftly.
Every product that ditech offers is available from other mortgage brokers/lenders (as ditech's parent company, GMAC, also has a wholesale division - GMAC-RFC).
I have heard (reliable sources, but never heard it first hand) that ditech's LO's routinely bait-and-switch (You are promised one thing on the phone, but it turns into something higher at closing). Also, sophisticated consumers like the readers here may be able to analyze & unbundle costs like increased interest rates for lower closing fees etc. Most customers are thrilled at the "no out of pocket fees" offered and don't analyse the extra 75 basis points too closely.
CNS
"As much as I love a good heated discussion or debate, lately they seem to be depreciating very quickly."
Well, this is a real estate bubble blog, we're knee-deep in rapid depreciation!
:)
ReInvestor, please stick to losing money in real estate, as history is not your strong suit.
See Delford's post above, and some history books.
And while Stalin is dead, his followers are not:
The Washington Post
January 22, 2003; Page A15
Marching With Stalinists
By Michael Kelly
International ANSWER (Act Now to Stop War and End Racism) is a front group for the communist Workers World Party. The Workers World Party is, literally, a Stalinist organization. It rose out of a split within the old Socialist Workers Party over the Soviet Union's 1956 invasion of Hungary -- the breakaway Workers World Party was all for the invasion. International ANSWER today unquestioningly supports any despotic regime that lays any claim to socialism, or simply to anti-Americanism. It supported the butchers of Beijing after the slaughter of Tiananmen Square. It supports Saddam Hussein and his Baathist torture-state. It supports the last official Stalinist state, North Korea, in the mass starvation of its citizens. It supported Slobodan Milosevic after the massacre at Srebrenica. It supports the mullahs of Iran, and the narco-gangsters of Colombia and the bus-bombers of Hamas.
http://www.washingtonpost.com/wp-dyn/articles/A25043-2003Jan21.html
And this group backs (financially and otherwise) these recent rallys by foreign nationals who are demanding US citizenship. They will back any group who seeks to undermine the United States.
Also, the land of which you speak was either sold to the US, or brought into US hands by treaties.
Please open up a history book.
"George Soros is a greater threat to this country than these people who have no money and have little way of projecting their influence."
Hello!?, Soros helps fund "International ANSWER" and similar groups.
As for "no influence" they have money, and are the ones organizing most of these mass rallies. They held huge rallies in Washington days after 9-11 to oppose the US response in Afghanistan. They organized and assisted the recent rallies by foreign nationals demanding US citizenship.
http://www.mexica-movement.org/granmarcha.htm
Please get real. All borders for all "countries" are contrived. The world didn't come pre-equipped with lines and labels like a classroom globe, they were created by war, purchase, or through treaties.
The US is a sovereign nation, and anyone who wants to challenge its borders will suffer badly.
We're way off course from real estate now, but seeing your posts regurgitate the talking points of these nutty anti-American groups was too ironic to let go.
I'm willing to bet that there isn't a single poster here who is a pure bred Native American. Everyone here is the descendant of immigrants and every immigrant group has been vilified by those previous to them. Just read a history book to find out what was said about the Italians, the Irish, the Germans, the Eastern Europeans and so on as they arrived. And don't forget that the really early guys - such as those on the Mayflower - were hardly the cream of English society, they were the outcasts.
As to the targeting of Hispanics, of course, as has been pointed out they are a group looking for mortgages, why wouldn't the mortgage companies work for their business. I'm not sure how vulnerable they are to foreclosure actually as if they really are living in close quarters and sharing mortgages that would make them less vulnerable.
I'm willing to bet that there isn't a single poster here who is a pure bred Native American.
I'm so tired of this non-sequitur. Who can name one nation anywhere that has people who can't trace their ancestory to some other place if you go back far enough?
I was born here. So were my parents. I'm native american as far as I'm concerned.
ReInvestor, here's an "ANSWER" poster held up by a muslim kid at a rally in support of the nutcase regime in Iran:
Long link:
http://news.yahoo.com/news?tmpl=story&u=/060511/481/jak10805111331
Short link:
http://tinyurl.com/gv5y5
The only true Americans are Clovis-Americans.
http://www.pbs.org/wgbh/nova/stoneage/
But can Clovis-Americans get a suicide loan to buy over-priced real estate?
Gringo: "So why is Mexico so poor?"
Mexican: "It is because your coontry stole half our land. And not only that Senor, you stole the half with all the paved roads."
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