The Pew Hispanic centre has run multiple regression analysis of foreclosure rates by county. It’s findings will no doubt stir up controversy because they demonstrate that the mortgage meltdown isn’t a melting pot. The foreclosure rate is actually strongly correlated with the size of the immigrant population in a county. The larger the share of immigrants in a county, the more foreclosures there are.
It’s also not colour-blind. Foreign born Latinos account for a far greater share of foreclosures than other immigrants.
Of course, it’s not exactly clear what we should conclude for this. Perhaps immigrants are just riskier borrowers. The other possibility raised by the Pew Hispanic centre is that immigrants may have been attracted to the boomiest areas of the countries. Housing booms, in particular, may be especially good at attracting immigrants because they create low-skill jobs for housing bombs. Perhaps another possibility, although the Pew people don’t raise it, is that immigrants are not as good at marshalling legal and other defenses against foreclosure.
Here’s how the study describes the conclusions:
Of the several demographic attributes included in the analysis, the immigrant share of the county population is the one that emerges as the most important correlate with the foreclosure rate. And within the immigrant population, the share of foreign-born Latinos stands out as a more notable influence than the share of non-Hispanic immigrants (Appendix Table A5). This may mean exactly what it appears to be—the foreclosure rate among the immigrant population, especially immigrant Latinos, is higher than average.
However, it is also possible that the presence of immigrants serves merely as a stand-in for underlying circumstances not otherwise captured in the data. In recent years, the construction boom attracted immigrants in large numbers into new settlements in the U.S. (Kochhar, Suro and Tafoya, 2005; Frey, Berube, Singer and Wilson, 2009) Many of these areas, such as those surrounding Las Vegas and Atlanta are now witnessing sharp reversals in construction and high rates of foreclosures. The increased presence of immigrants in an area may simply signal the effects of a boom-and-bust cycle that has raised foreclosure rates for all residents there. Thus, it is not possible to affirm that immigration levels in and of themselves raise foreclosure rates.
Here’s the study: