Uncomfortable Thought: Did the Defeat of Shamnesty Accelerate The Subprime Mortgage Crisis?

In the post below this one I linked to this old WSJ editorial from August that contained an interesting prediction:

As the conditions of illegals worsen, they will be more likely to default on mortgages and credit cards, problems that affect us all.

Well, enforcement measures--plus the defeat of shamnesty itself-- seem to be working and people are self-deporting. And when they did, they may have walked away from those mortgages. Here's an interesting demographic:

...almost half of the mortgage loans in the hands of Hispanics are subprime, making them especially vulnerable to the housing downturn.

Now I don't know whether this is really what's happened or not, but it would make an interesting investigative report for a newsman or even a social scientist--to what degree have modest successes in enforcing immigration law caused the subprime crisis?

The other interesting question is this: Pia Orennius in that WSJ piece obviously saw this happening, and she's "senior economist and policy advisor at the Federal Reserve Bank of Dallas" . Who else knew? Did she just say the quiet part loud? Was it a well-known fact within the financial world that immigration enforcement would topple the house of cards? If so, it was the sort of problem that you couldn't admit publicly. You couldn't, as president of (e.g.) Citibank, go out there during the Shamnesty debate and say something like, e.g.,

"Actually, we know for a fact that blah point blah percent of our outstanding loans are to illegal immigrants, so please, please, please grant them this amnesty or they'll all default and the country will undergo a financial crisis!"

No, you couldn't say that. You'd have to fight the pro- border security groundswell without revealing that embarrassing fact about your reasons and undermining confidence in the economy.

Anyway, idle speculation from me, and even if true, only a small part of a much more complex problem. But it would explain another aspect of big-business opposition to border security: it's more than just the service industry and manufacturing--the financial sector was worried as well. because they were in it up to their eyeballs. Here's how I responded to Orennius' concern for these lenders back in August:

I can only conclude that any bank that lends money to an illegal alien to buy a house was either abysmally incompetent in its due diligence background check, or just plain knew it was loaning money to an illegal. And I say, that sucks to be that bank. However, I might be willing to loan them a small amount to help them out--say, 25 cents.

If I'm right about this, it's also uncomfortable to think that an unintended consequence of opposing shamnesty was an attentuating of the subprime crisis. In our defense, no one but Pia Orennius warned us, and she did so after the bill went down.

Previously on JYB: The Betrayal of the Ownership Society