The Field Negro just posted this argument on his sidebar. I will reproduce it in full without permission because I think it is a perfect example of politics of purposely defying the market for socialist reasons.
Dear *[field negro]*,I'm coming to you as a big time reader (and troll, I never comment).There's an issue on my radar that has been overwhelmingly disregardedby the mainstream media. The Bush administration, helped by Uncle TomAlphonso Jackson, is eliminating downpayment assistance programs thathave helped hundreds of thousands of people gain first time homeownership. This is about modern civil rights, wealth creation andasset ownership.
'Modern' civil rights? You mean the right to petition congress for a house? How is a government grant about wealth creation? It's the absolute opposite of wealth creation, it's a tax-funded subsidy. If you think you can create wealth by filling out an application to a government program, you don't know the first thing about wealth creation.
To me, breaking the chains of poverty means getting the down payment assistance necessary help working families and adults move into their own homes. . Eliminating down payment assistance is just another way to put Blacks into a modern day sharecropping system on the apartment renting plantation. Unfortunately, fake liberal Demprez candidate Chris Dodd is siding with the Bush admin to close this program... here's a little mini blog post I wrote below. If you could help promote this issue or at least mention it, that'd be great. Keep doing what you're doing.
I'll promote it too. With criticism.
First of all, where are black homeowners? It took me a minute to find out that the majority of African American families do not rent. I was looking for the stats at Booker Rising, but instead found this study by Collins & Margo. Download Collins_and_margoThey basically say:
At the turn of the century approximately 20 percent of black adult males (ages 20 to 64) owned their homes, compared with 46 percent of white men, a gap of 26 percentage points. By 1990, the black home ownership rate had increased to 52 percent and the racial gap had fallen to 19.5 percentage points. All of the long-term rise in the rate of black home ownership, and almost all of the corresponding long-term decline in the racial gap, occurred after 1940, with the majority of both changes concentrated in the 1960 to 1980 period.
Now, here is the deal on Down Payment Assistance Programs (DAPs).
The devil is in the details. These are the details our friends to the left would not bother to tell you. What Dodd is proposing is to close a loophole in the law which created DAPs which are non-profit middlemen / charities. It is perfectly legal for someone to give you a gift from a charitable organization to assist you with a down payment. It's basically illegal for a home seller to give you money for your down payment. This is how DAPs are being abused.
Imagine I have a house that's worth 250k. Generally speaking, you would need 10% down payment to get a conforming loan (FHA approved). 25k. But you don't have 25k, you only have 5k. No problem says I. I will give you 30k cash if you buy the house for 280k. You then will have 35k which is more than enough down payment for a conforming loan on a 280k house. It doesn't cost me anything, I still get all of my selling price of 250k, and you get some extra dough in your pocket. The difference, of course is that instead of a loan for 225k you now assume a loan of 250k, that is if you decide to pocket the other 7k. And why wouldn't you? Nevertheless, I have just artificially inflated the value of my house by more than 10%. Just for you.
The problem is that you couldn't afford a 250k house in the first place, now you have a mortgage that's even larger. The trick was that we used the DAP to front for me, because it's illegal for me the seller to give the down payment to you, the buyer.
Now your alternative as a buyer, is and has always been that you can take out a separate, cheap loan especially made for down payments. The interest rate on down payment loans is 3%. If you are a first time home buyer and somebody asks you what you would rather do, get 7k in cash and essentially a free down payment or take out a loan for your down payment and for your house, which would you choose? Hmm. Sucker!
The FHA has commissioned three studies which prove that the DAP loophole is the sucker bet and is actually more risky than taking out two loans, the down payment loan and the smaller mortgage. That is why they are closing the loophole.
We now return you to your regularly scheduled liberal noise.
Field...Presidential hopeful Chris Dodd, Chairman of Banking, Housing & UrbanAffairs Committee, is making the remarkable move of closing down aFederal program that has historically helped hundreds of thousands ofdisadvantaged groups and the poor achieve first time homeownership.Dodd is siding with Senate Republicans (like Senator Richard Shelby,R-AL no less) to give a slap in the face to Blacks and minorities across the country. Dodd is supporting Bush's HUD Secretary AlphonsoJackson in his move to eliminate downpayment assistance programs.According to the GAO, the move to get rid of downpayment assistanceprograms will bar approximately 40% of African-American homebuyersfrom utilizing Federal Housing Administration insured loans.
Alsoaffected are potentially 30% of Latinos.What Senator Dodd is doing will screw the poor, minorities, and manysingle parent mothers from ever owning a home. True progressives Rep.Maxine Waters and Rep. Barney Frank have showed their leadership in securing a bill in the House to protect this program. In the Senate,Senator Dodd holds the keys. Sign this petition and call Senator Doddnow. For more information on this issue, see below.[for blogs, often you may post the long portion of your text in a'below' or 'read more' section]Here's the lowdown. Downpayment assistance programs allow nonprofitsto assist home buyers in providing the minimum down payment requiredfor Federal Housing Authority (FHA) loans. Shutting down this programwill effectively destroy the nonprofits seeking to help first timehome buyers achieve their dreams of home ownership. From 2000 through2006, more than 650,000 buyers got their down payments throughnonprofits. HUD Secretary Alphonso Jackson believes with the recentforeclosures occurring because of subprime loans, an increased numberof borrowers will seek downpayment assistance and place enormousfiscal stress on the FHA. However, Secretary Jackson is overlookingthe fact that if downpayment assistance programs are shut out, evenmore borrowers will be FORCED into predatory loan agreements andsubprime loans. The reality is, downpayment assistance programs are needed more than ever now, and to remove the program is to put families onto the street and to keep an entire segment of thepopulation continually renting from landlords..
blah blah blah. lies lies lies.UPDATE: Five years later, the Washington Post relates the sad tale of foreclosed blacks.
For blacks, the picture since the recession has been particularly grim. They disproportionately held subprime mortgages during the housing boom and are facing foreclosure in outsize numbers. That is raising fears among consumer advocates, academics and federal regulators that the credit scores of black Americans have been systematically damaged, haunting their financial futures.