Housing Push for Hispanics Spawns Wave of Foreclosures

And don't forget Pay Option loans (Loan Center of California, we're looking at you, if you're still out there...)

This part is particularly funny:

Nahrep's 2006 convention in Las Vegas was called "Place Your Bets on Home Ownership." Countrywide Chairman Angelo Mozilo spoke, as did former Housing and Urban Development Secretary Henry Cisneros, a force in Latino housing developments in the West.

Towards the peak, there was little attempt to camoflauge the speculative nature that homeownership had taken on. After all, a loan with little or no money down is just a highly leveraged loan, which implies a "hedge-fund-like" speculation on market conditions -- regardless of what the borrowers intended.

Also notably, this piece mentions seller-funded downpayment assistance lending (SFDPA -- see our statement here.). Baca co-sponsors HR 6694 to bring it back. The article mentions some of the cozy relationships between Baca and SFDPA ringleader Ameridream:

In October 2008, a charitable foundation set up by Mr. Baca received $25,000 from AmeriDream Inc., a nonprofit housing company and Hogar sponsor. Mr. Baca has long backed AmeriDream's controversial seller-financed down-payment assistance program. AmeriDream provided down-payment money to buyers, a cost that was covered by home builders in the form of donations to the nonprofit.

New housing legislation last fall outlawed the program. Mr. Baca is cosponsoring a bill that would allow AmeriDream and similar nonprofits to resume arranging seller-financed down-payment assistance to low-income Federal Housing Administration borrowers.

Such seller-financed loans comprise one-third of the loans backed by the FHA, and have defaulted at nearly triple the rate of other FHA-insured loans, according to agency spokesman William Glavin.

Update: Housingwire also has some commentary related to this topic.

The number of abuses that took place in originating loans in this market sector is wide-ranging, and clearly involves lax lending standards and aggressive lending policies. But many of those now fingering blame upon lenders shouldn’t allow community groups to whitewash history; after all, many such groups had a direct role in enabling — and, in some cases, profiting from the push into subprime mortgages.