In the ensuing years, the real estate and financial industries used the Clinton and Bush regulations to sell houses and mortgages to many poor Hispanics, including to many new immigrants who eventually would be unable to meet their financial obligations.
A January 2009 Wall Street Journal article quoted Tim Sandos, then at the National Association of Hispanic Real Estate Professionals, saying “We would say, ‘Is he breathing? OK, we’ll give him a mortgage.’”
Many government-backed loans went to Hispanics in California, Nevada, Florida and other southern states. In turn, the loans spurred a massive building boom, further immigration, and yet more construction in Las Vegas, in Californian exurbs and in former deserts.
“Gerardo Cadima, a Bolivian immigrant who works as an electrician, bought a home in suburban Virginia for $330,000, with no money down,” the Wall Street Journal reported. “‘I said this is too good to be true,’ he recalls. ‘I’m 23 years old, with a family, buying my own house.’ When work slowed last year [in 2008], Mr. Cadima ran into trouble on his adjustable-rate mortgage. ‘The payments were increasing, and the price of the house was starting to drop,’ he says. ‘I started to think, is this really worth it?’ He stopped making payments and his home was sold at auction for $180,000.”
From 2005 to 2009, the U.S. Hispanic home ownership rate fell from 51 percent to 47 percent; it likely has fallen further because people who bought late in the bubble are more likely to foreclose, said Kochhar. By 2009, the overall Hispanic home ownership rate returned to the level it was in 1999, he added.
The home ownership rate among black households fell only 1 point by 2009, to 46 percent. The ownership rate among white households remained unchanged at 74 percent during during the 2005–2009 downturn, Kochhar said, and has likely remained stable since.