Christopher Donovan: Before it slips too far into my rear-view mirror, I have to post about an NPR report I heard on the way to work last week about the mortgage meltdown. The reporter focused on a single block in California and interviewed residents Anita Sandoval, Brenda Moore, and William and Laura Betts. The story I link to doesn’t mention it, but if you listen to the broadcast, it’s obvious that Sandoval is Hispanic, Moore is black, and the Betts are white.
Unwittingly, I’m sure, the reporter captured the racial specifics of the mortgage meltdown in microcosm. Sandoval, the Hispanic, simply stopped making payments on her mortgage. Moore, the black woman, refinanced eight times, and now owes $300,000. The Betts were the lone examples of responsible financial behavior: they now own their home, though the rollercoaster of appreciation and depreciation left them with an unimpressive gain in equity.
Such are the impoverishments for whites who live in the multiracial society: The responsible, hard-working Betts are, in many ways, underwriting the irresponsibility of the Sandovals and the Moores through higher interest rates and probably other ways I’m not aware of.
Particularly striking was the short time-horizon view of Moore, the black woman: “I look at it this way: You’re sitting on a bank, so if you can use it, use it because you can’t take it with you, so enjoy it while you can.”
Contrast this with the frugality of the Betts, who would send in 10 extra dollars with each mortgage payment.
And, of course, Moore’s understanding of finance is incorrect: she’s not sitting on a source of free money, she’s sitting on an asset that can secure a loan — but a loan that either has to be paid back or foreclosed and the house taken away.
Here’s a financial think-tank of the liberal persuasion admitting that blacks and Hispanics have shorter time-horizons than whites.
How many whites understand that what’s often characterized as a “crazy and unpredictable” economy has some forbidden explanations?
Christopher Donovan is the pen name of an attorney and former journalist. Email him.