This is false. There's no evidence for race (or class) being a major factor in the increase in defaults. The financial crisis was caused by an increase in delinquencies in middle and high credit borrowers. https://twitter.com/StefanMolyneux/status/1078868440826314752 …
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Replying to @bechhof @besttrousers
Don't know much about this subject so I can't express an opinion. But Wikipedia claims that "Members of US minority groups received a disproportionate number of subprime mortgages, and so have experienced a disproportionate level of the resulting foreclosures."
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Wikipedia also seems to suggest that the goal of increasing minority homeownership was a factor in government policies that encouraged subprime lending.https://en.wikipedia.org/wiki/Government_policies_and_the_subprime_mortgage_crisis#Government_%22affordable_homeownership%22_policies …
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Not an expert and haven't thought about this for years but I was writing briefs on this for [a] Fed branch at the time Subprime and Alt-A shit went really bad after '05 vintage, which is when private sector bailed and most subsequent debt went on GSE books
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Replying to @eigenrobot @nathancofnas and
Hard to piece together precise policy mechanisms but there was a lot of pressure from Left Congress (eg, Barney Frank) for GSEs to step in and load up on low-end non-conforming loans which previously they hadn't/were forbidden to insure
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Replying to @eigenrobot @nathancofnas and
Without GSE insurance most of the really bad 05-07 mortgages wouldn't've been originated My first time really doubting ECONOMISTS came when I read a Krugman column denying the GSEs were involved just after I'd spent a week poring over their shady financial statements
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I don't trust a survey of a panel of EUROPEAN EXPERTS ranking causes without any structure and also they ranked "bad incentives" third which is closer to what I'm on about :/
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