The middle column of this graph lifted from Dr. Housing Bubble is the interesting one — it shows by year what percentage of first-time home buyers in California got a mortgage with no down payment.
In the last three years of the Clinton Administration, it was only about 7%. In 2002, Bush started making speeches denouncing down payments as the primary barrier to minority home ownership. By 2003, 20% were getting their first house with zero money down. By 2006 it was 41%. Think about the quality of debtor who was left to buy his first home in 2006 with no money down after two years in which one-third of all home purchases were no money down. Does the term "scraping the bottom of the barrel" come to mind?
Was it different in the rest of the country? I don`t know, but California is more or less what mattered. Remember the old John Prine song about a smack addict, "Daddy Has a Hole in His Arm Where All the Money Goes"? Well, California is the hole where all (or about half) of the defaulted mortgage money went. Similarly, if Bush`s plan to add 5.5 million minority homeowners by 2010 was going to happen, it had to happen most of all in California, which has 20 million minority residents.
If Bush was a cynical bastard like Richard Nixon, he could have told his people right after he got re-elected in late 2004 to turn off the money machine. Think of how much less damage there would have been without all the idiotic loans of 2005-2007. But, no, Bush drank the Kool-Aid. No soft bigotry of low expectations for him!