Tomorrow Senator Hillary Clinton will address the Building Construction Trades 2007 Legislative Conference in Washington, DC. I suspect she’ll say something about the subprime mortgage “meltdown” and what that means for the construction industry and American homeowners.

I was struck by the absolute agreement with this comment by AmericaBlog’s John Avarosis, a lefty, making me suspect this is not going to be a traditional left-right issue:

I can deal with someone who was cheated by their mortgage broker, banker, or whomever. Someone who was literally lied to about how much their mortgage was going to cost them now, in two years, in five years, in ten years. But what I can’t deal with are all of these heart-tugging news broadcast and Joe and Suzie who simply wanted the American dream for their children, so they risked their entire family’s livelihood on a gamble that they could sell a house they couldn’t afford before the “real” mortgage rate kicked in. Sorry, Charlie, but those people knew what they were doing. They gambled. They lost. I had the same choice they did, and I said “no,” things were simply too expensive. So now they get a bail out and I get nothing because they wanted money for nothing? I don’t think so.

This front-page story in yesterday’s Washington Post struck me as an example in which the circumstances were being squeezed to fit the standard, “World Ending Tomorrow; Women, Minorities Hardest Hit” template.

Immigrants are emerging as among the first victims of a growing wave of home foreclosures in the Washington area as mortgage lending problems multiply locally and across the country.
Nationally, 375,000 high-interest-rate loans were made to Hispanics in 2005, and nearly 73,000 of them are likely to go into foreclosure, said Aracely Paname?o, director of Latino affairs for the Center for Responsible Lending. About 1.1 million homes in the United States are expected to go into foreclosure in the next six years, and many native-born Americans are likely to be stuck with burdensome loans. But immigrants are getting hit first in part because their incomes tend to be lower and many have lost construction jobs.

Here’s the example in the story that rankled with me:

Nahid Azimi, who immigrated to the United States from Afghanistan 22 years ago, recently stood in the upstairs hallway of her home in Loudoun County, silently sobbing as she removed the last of her personal items from the $410,000 townhouse in South Riding she bought with pride last summer. She said she was persuaded to buy the house by an Afghan real estate agent she considered a friend and by an Afghan mortgage broker who promised to get her a good loan.
Instead, Azimi, a cashier at Giant who makes $2,400 a month, found herself strapped into a no-down-payment loan with payments of $3,800 a month. She knew it would be impossible to make the payments, but the mortgage broker promised to refinance her loan to make it more affordable. Azimi couldn’t qualify for the refinance, however, so she got a second job to try to cover the costs, borrowed money from her friends and tried unsuccessfully to sell the house. Then one day in November, she collapsed at work, in part because of the stress.
Today, she will call the loan servicing company and offer to give back the keys.

Does some fault lie with the real estate agent, for selling a house that this woman had little chance of being able to afford? Yes. But why, oh why, did this woman believe she could afford a $3,800 a month mortgage with an income of $2,400 a month? Where did she think the additional $1,400 was going to come from? No matter how complicated the financial terminology, no matter how fine the print, couldn’t she figure out that not enough money was coming in and too much was expected to go out? (I know, I know, the magic of “refinancing.” But at no point did she ask anyone, or herself, “what happens if I’m not approved for refinancing?”)

How many of her fellow Giant cashiers were purchasing $410,000 houses on their salaries?(Actually, considering the ubiquity of these high-risk loans – “liar’s loans”, ARMs, interest-only mortgages, etc. – maybe it was quite common for supermarket cashiers to take out mortgages on $400k homes.)

More details from this story:

Places where immigrants cluster have been particularly hard-hit. Semidey said that the most calls are coming from Manassas, Woodbridge and Dale City in Virginia and Gaithersburg, Germantown, Capitol Heights and Langley Park in Maryland. But one recent caller was the owner of a $1.5 million home in McLean, a restaurateur who has seen her business slide in recent months as the slowdown in the construction industry pinches the pocketbooks of her Latino patrons. Another was an illiterate carpenter who bought a $750,000 house in Ashburn Village, Semidey said.

If you are illiterate, why are you signing mortgage documents?

Here’s the thing. Over the last, oh, half-decade or so, the irresponsible – those willing to take out adjustable rate mortgages, no-down-payment mortgages, etc., – priced out the responsible. This imbalance is rectifying itself. Any politician who calls for a taxpayer-funded bailout of people who bought more than they can afford, and made massive financial commitments without understanding them, ought to be booed and pelted with vegetables.

UPDATE: Here’s some perfectly terrifying poll results:

Bankrate, Inc. today released a new Bankrate.com poll which found that more than three in ten homeowners (34%) do not know what type of mortgage they own. Furthermore, 28% of those surveyed worry about how they will afford their payments…
Another notable finding is that 34% of homeowners with adjustable rate mortgages (ARM) do not know what they will do when their loan readjusts.

By the way, that’s a phone poll, not an online poll, nationally representative sample of 1,004 adults, aged 18 or older.