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Reminiscent of John Edwards presidential campaign, Angelo Mozilo told a conference that the credit crisis that we have gone through will primarily hurt minority lending. This may be so, but the use of financial instruments to promote social causes is never in the best interests of any party.

Typically newer immigrants are a rental class. They spend a generation moving from not knowing the language and working in lower paying jobs. Once they start learning the culture and moving up the socio economic ladder then they are in position to attain home ownership.

But the past 5 years put many into homes and skipped the whole process of assimilation. Not to say this is a bad thing, but their has been a successful transition period that immigrants have gone through as they enter the United States till they achieved home ownership.

As a child growing up on Long Island this was the pattern that I grew up with. Everyone it seems grandparents or great grandparents came over on a boat. And most of my friends parents were born in a rental apartment in Brooklyn or the Bronx and then bought their first house out on the Island. It was a momentous occasion in the family history, just as the first child ever to go to college.

But Mozilo thinks that home ownership is a right and maybe even a civil right. And his company is predicated on bundling loans to people that may or may not be able to afford them. I think one of the worst things one can do is sell a home to someone who is not in a position to afford it, whether they are a minority, recent immigrant, or young couple. There is more to owning a home than paying a mortgage but when your business model is writing loans that you will never see again, I can see why you are not concerned.

“The structure of the business is permanently changed … The industry will never be the same,” said Angelo Mozilo, speaking at a real estate conference in downtown Los Angeles.
He said the credit crisis inspired fear among lenders, who are increasingly less likely to lend to risky borrowers.
“As a result, I believe that five years from now, or sooner, there will be substantial disparities between home ownership between whites and minorities,” said Mozilo, whose company is the largest U.S. lender to African-Americans, Hispanics and Asians. via Reuters

Related posts:

1. Countrywide CEO Mozilo Gives Up 40 Million Dollar Severance Package
2. Pending Foreclosures At Countrywide Financial Double From Last Year
3. H&R Sued In Massachusetts Over Minority Lending
4. Countrywide Lending Falls Off 17 Percent in August
5. Zell Says No Credit Crunch - Instead a Confidence Crunch