There are over 3,110 counties in the United States, and last year 35 of them accounted for fully half of the home foreclosures and repossessions:
Goddamn you, California and Florida.
So what makes these areas so prone to foreclosures? Just speculating here, but they appear to fall into two broad categories: areas that are just economically devastated and areas that are sprawling, overbuilt trainwrecks. In other words, a healthy mix of places where people have no money and places where people were flipping houses to make a quick buck. The problem is there aren't too many of the former – only a few like Cleveland, Washington D.C., and…well, that's about it. The rest of these counties are among the fastest growing and most economically productive (pre-crisis) areas of the country: Las Vegas, Phoenix, Southern California, the Bay Area, Dallas, Central Florida…
You can see the source of my cognitive dissonance. The subprime crisis is supposed to be all about poor black people who borrowed money they couldn't repay (or, being shiftless as they are, refused to repay) because Democrats in Congress forced banks' hand with the CRA. Yet the nation's most impoverished areas aren't the ones glowing blue on this map. Instead we see the ones that led the way during the tech boom, the housing boom, the Iraq Defense Contracting Orgy boom, and the upper-class tax cuts boom. I can't say I have the spare time to do it at the moment, but it appears that if one assembled the data and created a model to test the relationship between socioeconomic characteristics and foreclosures, the rate of new home construction would prove quite significant.
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Or perhaps I will find that Scottsdale and Anaheim are populated almost exclusively with poor, black homeowners with $600,000 mortgages.
7 thoughts on “LAS VEGAS: POOR, BLACK”
Yup, yer absolutely right; it was them damn shiftless negroes. They made the Dems vote for CRA, leveraging their massive, evenly-nationally distributed electoral clout to implement a bill (prolly written by Farrakhan) designed to collapse the economic system we all depend on, forcing the government to give hundreds of billions of dollars to multibillionaires who will now, no doubt, re-distribute it to their ghetto-dwelling henchmen. Oh, and earmarks, also. And something about condoms. I need a drink….
Kordo, please don't forget the liberal holocaust of abortion. We would have plenty of upstanding White Americans to buy these houses if feckless sluts would stop murdering them just to keep the libruls happy.
I am sort of amazed at how many people still deny that the mortgage situation is the fault of the banks. It's not like fifty million Americans were clamoring for mortgages they couldn't afford – banks and their spawn aggressively marketed these loans to anyone with a pulse. During the late '90s and early Aughts, mortgage brokers were trained to "be creative" with roping in new borrowers – they were taught to set up booths at churches and other community centers, to pump whatever neighborhood or ethnic connections they had, and to be relentless.
There are many factors involved in our economic nosedive, but the core of the issue, I think, is that banks defaulted on their side of the social contract. America's "deal" with banks has always been that we would leave them pretty much alone as long as they behaved responsibly and policed themselves. They abandoned that by recklessly promoting the mortgages and more complex financial games that eventually exploded and left us where we are now.
If two parties have an agreement, and one party breaks that agreement, you blame the party in breach – not the party who acted in good faith. America's homeowners (new and old) have acted in good faith; it was the banks that violated their long-standing deal with America.
What we need now is powerful, effective, meaningful regulation of banking for at least two generations, to change the culture of banking in America. We have no choice but to re-build the social contract from the ground up.
Some of those issuing mortgages weren't even banks, but they would then sell the mortgages to banks which then bundled them and sold them again. Everyone got their money up front and didn't worry about whether or not the mortgage got paid off, it was a case of the more mortgages they wrote the more money they made, so they would put whatever it took on the paperwork to qualify for the mortgage.
I notice on your map that it is just a few areas where most of the foreclosures are happening. I see a little blip in the NW corner of Arkansas where Wally World is headquartered, so it's not all bad.
"Some of those issuing mortgages weren’t even banks, but they would then sell the mortgages to banks which then bundled them and sold them again. Everyone got their money up front and didn’t worry about whether or not the mortgage got paid off,"
This is really important. These shadow (non-depository) banks also thought rising house prices would basically takes care of the problems – allow homeowners to re-fi to pay the large fees, and give the bank a nice exposure to the housing market (which 30 year loans tend not to). It did, until of course it didn't.
Ed can you get this data? I'm curious for a closer look.
That odd little blip right around Bentonville is intriguing, but somehow I doubt it's executives at the House of Satan who are losing their McMansions.
Ed, did you see the recent article in the NYT about motels around Disneyland filling up with homeless "middle class" families who are now depending on charities to pay their room rent? Pretty soon hookers are going to start bitching about day rate motels not having any vacancies.
All those areas seem to have something in common: high growth at high cost that wasn't paid. Subsidized growth for growth's sake infested California, Arizona, Nevada, and Florida in ways the rest of the country only saw little peeks of. But it was done, it was absurd, and it will be a nightmare to figure out how to keep those homes full of the "right people" at the prices that the market will decide. Many communities will realize that they haven't the tax base for good schools and police departments, meaning the Promise of Suburbia will be exposed as a huge sham. The Going Galters will be pissed, but too poor to move. This is going to be so much fun to watch.
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