{"id":10217,"date":"2009-08-27T08:46:08","date_gmt":"2009-08-27T16:46:08","guid":{"rendered":"http:\/\/lukeford.net\/blog\/?p=10217"},"modified":"2011-04-27T07:26:42","modified_gmt":"2011-04-27T15:26:42","slug":"why-the-housing-boom-went-bust","status":"publish","type":"post","link":"https:\/\/lukeford.net\/blog\/?p=10217","title":{"rendered":"Why The Housing Boom Went Bust"},"content":{"rendered":"<p>I&#8217;m reading this new book by economist Thomas Sowell &mdash; <a href=\"http:\/\/www.amazon.com\/Housing-Boom-Bust-Thomas-Sowell\/dp\/0465018807\/ref=pd_bxgy_b_img_c\">The Housing Boom and Bust<\/a>.<\/p>\n<p>He writes that &quot;the idea that lenders would be offended by receiving monthly mortgage payment checks in the mail from blacks should at least give us pause. It should also be noted that a substantial majority of both blacks and whites had their mortgage applications approved.&quot;<\/p>\n<p>Lenders are in business to make money. If they can make money lending to blacks, they will.<\/p>\n<p>Statistical differences between groups are common and they can&#8217;t all be accounted for by discrimination.<\/p>\n<p>To fight this alleged discrimination, lawmakers imposed a lowering of lending standards across the board to people of all races, thus preparing the ground for the housing boom and bust.<\/p>\n<p>The Community Reinvestment Act of 1977 came to mean that regulators would impose quotas on lending and lenders had to find &quot;innovative or flexible standards&quot; to meet those quotas.<\/p>\n<p>Banks are federally regulated. They need government permission to many things that other businesses can do on their own. Banks had to meet a &quot;satisfactory&quot; rating for lending to minorities to diversify into selling investment securities or affiliating with insurance firms.<\/p>\n<p>In 1993, the Department of Housing and Urban Development (HUD) began bringing lawsuits against lenders who declined a higher percentage of black applicants than whites. Lenders responded rationally by lowering their down payment and income requirements.<\/p>\n<p><A HREF=\"http:\/\/www.refinancemortgagenow.net\/blog\/\/?p=4442\">Read On<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>I&#8217;m reading this new book by economist Thomas Sowell &mdash; The Housing Boom and Bust. He writes that &quot;the idea that lenders would be offended by receiving monthly mortgage payment checks in the mail from blacks should at least give &hellip; <a href=\"https:\/\/lukeford.net\/blog\/?p=10217\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[162,18192],"tags":[18223,18665,18664,18666,18191,32745],"class_list":["post-10217","post","type-post","status-publish","format-standard","hentry","category-economics","category-thomas-sowell","tag-boom-and-bust","tag-checks-in-the-mail","tag-community-reinvestment-act","tag-community-reinvestment-act-of-1977","tag-economist-thomas-sowell","tag-thomas-sowell"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/lukeford.net\/blog\/index.php?rest_route=\/wp\/v2\/posts\/10217","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lukeford.net\/blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lukeford.net\/blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lukeford.net\/blog\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lukeford.net\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10217"}],"version-history":[{"count":0,"href":"https:\/\/lukeford.net\/blog\/index.php?rest_route=\/wp\/v2\/posts\/10217\/revisions"}],"wp:attachment":[{"href":"https:\/\/lukeford.net\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10217"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lukeford.net\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10217"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lukeford.net\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10217"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}