Studies: Minorities more likely to get subprime loans, end up in foreclosure
"We don't really have a perfect explanation that we can really test," Madar said. "However, we are pretty sure that the first homebuyer tax credit was why you saw that big increase."
Madar has done some updating with recent data to try to confirm this assertion, but the 2010 data from the HMDA was not recent enough, as the tax credit was still in place during the first part 2010.
"It wouldn't surprise us if we saw the number of loans to LMI homeowners dropped as the tax credit disappears," Madar said. "We certainly expect a decrease in absolute numbers as eventually fewer people were able to use the tax credit."
Another shocker: The annual number of loans issued to LMI homebuyers in the "sand states" (the recession-pummeled states of Florida, Arizona, Nevada and California) jumped by 71 percent in 2009, so that the total in 2009 was almost a full rebound to the number of loans issued to LMI purchasers in 2004.
Equally dramatic is the increased share of all home purchase loans in these states that went to LMI borrowers. Between 2004 and 2006, the LMI borrower share of all home purchases in the Sand States fell to 8 percent; in 2009, it climbed to 34 percent.
Madar was also a little fuzzy on the cause of this anomaly, but he gamely suggested a combination of tax credits and home prices.
"It could be that home prices fell in those states so much more than the other states (that) it brought home prices more in line to what people found affordable," he said. "Home prices had previously been so expensive (that) it resulted in pent-up demand by LMI homebuyers."
The tax credits also had something to do with it, Madar added. In fact, if readers come away with anything from his study, Madar would hope it's the conclusion that tax credits really do help LMI borrowers.
Steve Bergsman is a freelance writer in Arizona and author of several books. His latest book, "Growing Up Levittown: In a Time of Conformity, Controversy and Cultural Crisis," is now available for sale on Amazon.com.
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