NAACP: Bank Giants Steered Blacks to Bad Loans

[Bass v 2.0]

BlackNews.com - Report Details Challenges Facing Black Women

NAACP: Bank Giants Steered Blacks to Bad Loans

By: Jesse Washington, AP National Writer

The NAACP is accusing Wells Fargo and HSBC of forcing blacks into subprime mortgages while whites with identical qualifications got lower rates.

Class-action lawsuits will be filed against the banks Friday in federal court in Los Angeles, Austin Tighe, co-lead counsel for the National Association for the Advancement of Colored People, told The Associated Press.

Black homebuyers have been 3 1/2 times more likely to receive a subprime loan than white borrowers, and six times more likely to get a subprime rate when refinancing, Tighe said. Blacks still were disproportionately steered into subprime loans when their credit scores, income and down payment were equal to those of white homebuyers, he said.

Both Wells Fargo & Co. and HSBC are receiving federal bailout funds. Messages left after hours with the banks were not immediately returned.

Amara Weaver of Milwaukee bought her first home in 1984, receiving a 6.25 percent fixed-rate mortgage. She says she had a steady job as a human resources director for a social services agency, never missed a mortgage payment and maintained excellent credit.

In 2004, she wanted to buy the house next door for her son to live in. She said the bank promised her a low fixed rate for a $40,000 loan, but at the closing, when reading the fine print, she noticed that the rate was actually 11 percent.

"I was blown away," said Weaver, an NAACP member. "I didn't have any choice (but to sign) ... it made me feel violated."

Similar NAACP lawsuits are pending against a dozen other subprime lenders.

"This is systematic, institutionalized racism," Tighe said. "Once you take out factors relative to income and credit risk, the only difference between the borrowers is the color of their skin."

Tighe estimated that "tens of thousands" of blacks had been forced into bad loans, but said it was difficult to gauge the scope of the problem because banks keep much of their internal data private. The lawsuits could force banks to divulge closely guarded information, such as how banks can determine the race of a loan applicant and how federal bailout funds are being spent.

The NAACP is seeking reforms from the banks such as increased transparency in the loan process, educational outreach and internal training.

© 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy.

 

[B94]

The NAACP is accusing Wells Fargo and HSBC of forcing blacks into subprime mortgages while whites with identical qualifications got lower rates.

"I was blown away," said Weaver, an NAACP member. "I didn't have any choice (but to sign) ... it made me feel violated."

Tighe estimated that "tens of thousands" of blacks had been forced into bad loans, but said it was difficult to gauge the scope of the problem because banks keep much of their internal data private.

I don't think anyone put a gun to their head.
Exactly how were they FORCED?
Why didn't they go to another lender?

 

[Burp]

I bet you have a picture of the bad bank men holding a gun to the borrowers head forcing them to sign.

If not, I bet Terral can make one for you.

 

[nia588]

this is a load of you know what. no one forced them to take these loans. im black and i know not to take out a loan that i can't payback.
and the NAACP needs to stop with their nonsense. these are the same people who gave R Kelly a black image award.

 

[Bass v 2.0]

this is a load of you know what. no one forced them to take these loans. im black and i know not to take out a loan that i can't payback.
and the NAACP needs to stop with their nonsense. these are the same people who gave R Kelly a black image award.

Yes, *BEFORE* is sex allegations. Anyways, explain blacks getting subprime loans with the same credit history as whites and whites still got much better rates? Why weren't blacks offered the same good rates?

 

[KittenKoder]

this is a load of you know what. no one forced them to take these loans. im black and i know not to take out a loan that i can't payback.
and the NAACP needs to stop with their nonsense. these are the same people who gave R Kelly a black image award.

Yes, *BEFORE* is sex allegations. Anyways, explain blacks getting subprime loans with the same credit history as whites and whites still got much better rates? Why weren't blacks offered the same good rates?

Really ... really ... really ...

In spite of getting such bad rates they were still stupid enough to get the loans ... hmm ... doesn't sound like they even cared about paying it back to me the way you put it ...

 

[Bass v 2.0]

BlackNews.com - AIG's Minority Racket

AIG's Minority Racket

By Earl Ofari Hutchinson

AIG ignited the national firestorm of rage with its shell out of $160 to $600 million in tainted bonuses to its tainted executives. But what has gotten almost no attention is a big reason that AIG had to stiff the government and everyone else. That’s the role that the company played in the subprime loan racket; a racket that hurt and still hurts tens of thousands of would be black and Latino homeowners.

The lender’s bait and switch tactics, the deliberately garbled contracts, deceptive and faulty lending, questionable accounting practices, and charged hidden fees, all with the connivance of sleepy-eyed see-no-evil oversight of federal regulators, are well known and documented. Their snake oil loan peddling wreaked havoc with thousands of mostly poor, strapped homeowners. A disproportionate number of them were Latinos and African-Americans.


Enter AIG. It saw a, treasure trove of fast buck riches in the subprime business. AIG dumped $33 billion into bonds and securities that were tied directly to subprime loans. This was nearly four times more than the next insurer, the German-based Allianz SE, had invested in the subprime loans. In fact, AIG was the only US based life insurer that had more than 3 percent of their general account assets in debts tied to subprime loans.

In early 2007 things started to unravel. AIG reported a first quarter loss of more than $2 billion in its subprime mortgage bonds. This set off the first warning bell that AIG could implode. Bond traders openly worried that AIG’s subprime securities losses could drag the market down. They had good reason to worry.

AIG is first and foremost an insurer. And in addition to its plunging bond and security holdings, the company also insured restructured subprime home bonds. The assumption by the subrprime bond holders was that the bonds would lose only a fraction of their value. But by then subprime defaults had piled up to a ten year high and the subprime lending market, that was all of it stocks, bonds and insurance, had badly frayed.

AIG’s stock had plunged 60 percent within the year. The top rating agencies, Moody's and Standard and Poor's, concerned over AIG’s continuing losses on subprime and other mortgage-backed securities, downgraded their credit rating. They demanded that company pay billions to creditors in order to bump back up their ratings. That was billions that AIG by then didn’t have.

AIG was clearly on a non stop down hill roller coaster ride, and many banks and lenders, were heading to perdition with them. AIG briefly flirted with the notion of filing for subprime mortgage lenders bankruptcy.

But there was a better deal to be had courtesy of a panicked then President Bush and Treasury Secretary Henry Paulson. They shoved out tens of billions in cash in what turned out to be only the first installment of cash to save AIG’s hide.

We may never know the full extent of the financial damage that AIG caused in the subprime market. Nor how manyprospective minority homeowners suffered losses both financial and personal from the company’s greed. United for a Fair Economy, a public advocacy research group, in an in-depth study on sub prime lending estimates that the tab for minorities for the dubious blending practices runs to more than $200 billion in lost equity and income during the years AIG and the subprime bank lenders ran amok. The group called the home losses the most massive loss of wealth for African Americans in U.S. history.

The ultimate tragedy is that many blacks who were enticed by the lenders through their web of lies and deceit into taking the risky sub prime loans didn’t really need them. Data from the Home Mortgage Disclosure Act found that about 40 percent of the black subprime borrowers could have qualified for cheaper mainstream mortgages.

But that was the last thing that the subprime lenders, let alone AIG wanted. This would have taken a big bite out of their fantasy level profits. In the end those profits turned out to be a smoke and mirrors illusion just as the subprime illusion was.

AIG happily aided and abetted the banks and lenders in their decade long fast and loose play with the lending rules. Taxpayers are, of course, paying and paying dearly for AIG’s greed and malfeasance. But thousands of black and Latino hoped to be homeowners are also paying for that greed. AIG’s minority racket is yet another sorry chapter in the AIG saga.

 

[KittenKoder]

So ... you are still saying that the black people who took the loans were either really stupid or had no intention of paying them back anyway ... odd you would accuse your own of something so bad.

 

[Bass v 2.0]

So ... you are still saying that the black people who took the loans were either really stupid or had no intention of paying them back anyway ... odd you would accuse your own of something so bad.

KittenTroller, do you even understand what the article is saying and how subprime lending can be discriminatory? The article said that 40% of the blacks who took subprime loans were actually qualified to receive prime loans, but because of mortgage discrimination they were steered into receiving subprime loans which carry a higher interest rate, which means higher payments, which will often lead to defaults. If these 40% qualified blacks were not denied cheaper, mainstream loans[which they were qualified for] they would have cheaper interest rates, which would result in far less defaults. Qualified whites were offered cheaper mainstream loans more than the qualified blacks even when their incomes and credit ratings were identical. Subporime lending is just another greedy way to bleed money from people via the higher interest rates charges.

 

[KittenKoder]

So ... you are still saying that the black people who took the loans were either really stupid or had no intention of paying them back anyway ... odd you would accuse your own of something so bad.

KittenTroller, do you even understand what the article is saying and how subprime lending can be discriminatory? The article said that 40% of the blacks who took subprime loans were actually qualified to receive prime loans, but because of mortgage discrimination they were steered into receiving subprime loans which carry a higher interest rate, which means higher payments, which will often lead to defaults. If these 40% qualified blacks were not denied cheaper, mainstream loans[which they were qualified for] they would have cheaper interest rates, which would result in far less defaults. Qualified whites were offered cheaper mainstream loans more than the qualified blacks even when their incomes and credit ratings were identical. Subporime lending is just another greedy way to bleed money from people via the higher interest rates charges.

But they still signed them ... so either they were too stupid to fight or just walk away or they had no intention of paying them back, you are calling them either thieves or idiots ...

 

[Bass v 2.0]

So ... you are still saying that the black people who took the loans were either really stupid or had no intention of paying them back anyway ... odd you would accuse your own of something so bad.

KittenTroller, do you even understand what the article is saying and how subprime lending can be discriminatory? The article said that 40% of the blacks who took subprime loans were actually qualified to receive prime loans, but because of mortgage discrimination they were steered into receiving subprime loans which carry a higher interest rate, which means higher payments, which will often lead to defaults. If these 40% qualified blacks were not denied cheaper, mainstream loans[which they were qualified for] they would have cheaper interest rates, which would result in far less defaults. Qualified whites were offered cheaper mainstream loans more than the qualified blacks even when their incomes and credit ratings were identical. Subporime lending is just another greedy way to bleed money from people via the higher interest rates charges.

But they still signed them ... so either they were too stupid to fight or just walk away or they had no intention of paying them back, you are calling them either thieves or idiots ...

Jackass, people who are denied loans from one bank when they really need money go to other banks to get loans. If qualified people are denied loans based on race and are forced to take subprime loans thats called mortgage discrimination and racial steering to subprime loans when none is needed. Please explain why those 40% of blacks who took subprime loans were denied better loans with cheaper rates when they actually were qualified for cheaper mainstream loans if discrimination played no part? The thieves are the subprime lenders who knowingly charge higher interest rates to people who qualify for much cheaper rates, that happens when there is little to no government monitoring of lending practices.

 

[KittenKoder]

KittenTroller, do you even understand what the article is saying and how subprime lending can be discriminatory? The article said that 40% of the blacks who took subprime loans were actually qualified to receive prime loans, but because of mortgage discrimination they were steered into receiving subprime loans which carry a higher interest rate, which means higher payments, which will often lead to defaults. If these 40% qualified blacks were not denied cheaper, mainstream loans[which they were qualified for] they would have cheaper interest rates, which would result in far less defaults. Qualified whites were offered cheaper mainstream loans more than the qualified blacks even when their incomes and credit ratings were identical. Subporime lending is just another greedy way to bleed money from people via the higher interest rates charges.

But they still signed them ... so either they were too stupid to fight or just walk away or they had no intention of paying them back, you are calling them either thieves or idiots ...

Jackass, people who are denied loans from one bank when they really need money go to other banks to get loans. If qualified people are denied loans based on race and are forced to take subprime loans thats called mortgage discrimination and racial steering to subprime loans when none is needed. Please explain why those 40% of blacks who took subprime loans were denied better loans with cheaper rates when they actually were qualified for cheaper mainstream loans if discrimination played no part? The thieves are the subprime lenders who knowingly charge higher interest rates to people who qualify for much cheaper rates, that happens when there is little to no government monitoring of lending practices.

No one needs a loan, so now you are saying they are all poor fools who wasted their money and went crying for someone else money. Damn, you seriously hate black people.

 

[William Joyce]

Jackass, people who are denied loans from one bank when they really need money go to other banks to get loans. If qualified people are denied loans based on race and are forced to take subprime loans thats called mortgage discrimination and racial steering to subprime loans when none is needed. Please explain why those 40% of blacks who took subprime loans were denied better loans with cheaper rates when they actually were qualified for cheaper mainstream loans if discrimination played no part? The thieves are the subprime lenders who knowingly charge higher interest rates to people who qualify for much cheaper rates, that happens when there is little to no government monitoring of lending practices.

I love it: If banks don't lend to blacks because their credit stinks (and it usually does), they're racist. If they DO lend to blacks, they're racist because they fooled the poor blacks into taking a loan.

Wha?

The bottom line is that blacks in America have TERRIBLE credit, and this goes a long way to explaining... a lot. Blacks are present-oriented people, not future-oriented people, so the concept of "pay the loan back on time" does not register with them. Actually, the concept of doing anything on time does not register with them.

That's not whites' fault.

 

[driveby]

KittenTroller, do you even understand what the article is saying and how subprime lending can be discriminatory? The article said that 40% of the blacks who took subprime loans were actually qualified to receive prime loans, but because of mortgage discrimination they were steered into receiving subprime loans which carry a higher interest rate, which means higher payments, which will often lead to defaults. If these 40% qualified blacks were not denied cheaper, mainstream loans[which they were qualified for] they would have cheaper interest rates, which would result in far less defaults. Qualified whites were offered cheaper mainstream loans more than the qualified blacks even when their incomes and credit ratings were identical. Subporime lending is just another greedy way to bleed money from people via the higher interest rates charges.

But they still signed them ... so either they were too stupid to fight or just walk away or they had no intention of paying them back, you are calling them either thieves or idiots ...

Jackass, people who are denied loans from one bank when they really need money go to other banks to get loans. If qualified people are denied loans based on race and are forced to take subprime loans thats called mortgage discrimination and racial steering to subprime loans when none is needed. Please explain why those 40% of blacks who took subprime loans were denied better loans with cheaper rates when they actually were qualified for cheaper mainstream loans if discrimination played no part? The thieves are the subprime lenders who knowingly charge higher interest rates to people who qualify for much cheaper rates, that happens when there is little to no government monitoring of lending practices.

That's the beauty of a non-monopoly, free market. If one bank has a high interest rate, get quotes from one, two, six more. Or are you gonna make some ridiculous claim that there is a conspiracy in which ALL banks give blacks these higher rates? If so, do you have a legit source that says so or are you just a sellout ?


P.S. Call me crazy, but somehow i believe this more than i believe you.

http://www.usmessageboard.com/current-events/71969-good-bank-fed-pressuring-it-to-make-risky-loans-now.html

 

[xotoxi]

I think someone has logged onto Charlie Bass's USMB account and has started this thread.

It is obviously isn't him, since the thread has nothing to do with his favorite subject...homosexuality.

 

[Bass v 2.0]

I love it: If banks don't lend to blacks because their credit stinks (and it usually does), they're racist. If they DO lend to blacks, they're racist because they fooled the poor blacks into taking a loan.

Apparently you're hard of reading, 40% of those blacks who were steeredinto subprime loans had good credit, those blacks weren't forced into subprime loans because of stinky credit, it was because of mortgage discrimination. Forcing people who have good credit into subprime loans because of mortgage discrimination is ripping them off, its all about greed and that greed is what has taxpayers footing the bill via bailout funds to these same damn greedy companies. Like the race obsessed ignoramus you are, you're sitting thereblind to whats really going on and the idiot is you because your tax dollars are bailing these people, yet you're taking shots at blacks.

The bottom line is that blacks in America have TERRIBLE credit, and this goes a long way to explaining... a lot. Blacks are present-oriented people, not future-oriented people, so the concept of "pay the loan back on time" does not register with them. Actually, the concept of doing anything on time does not register with them.

That's not whites' fault.

Racist BS trash, you racists whites are the ones with the problems, the rich whites have brainwashed you stupid crackers ino believe blacks and other minorities are the ones with problems when it is the *RICH* whites who are the problem thats making this country fail.While they[the rich greedy whites] on one hand pay the race card with idiots like you by making you think in your degenerate mind that because you are white you are superior and entitled to everything good on this earth they're busy robbing you blind on the other hand and manipulating idiots like you to point the finger at the wrong people. Despite the obvious truth, you stupid racist whites still think you have higher IQs yet don't have the intellectual capacity to see that you're getting duped.

 

[Bass v 2.0]

That's the beauty of a non-monopoly, free market. If one bank has a high interest rate, get quotes from one, two, six more. Or are you gonna make some ridiculous claim that there is a conspiracy in which ALL banks give blacks these higher rates? If so, do you have a legit source that says so or are you just a sellout ?

You must be on dope or dog food, this is exactly the evil of capitalism. Mortgage discrimination and redlining are not beautiful things.

 

[KittenKoder]

That's the beauty of a non-monopoly, free market. If one bank has a high interest rate, get quotes from one, two, six more. Or are you gonna make some ridiculous claim that there is a conspiracy in which ALL banks give blacks these higher rates? If so, do you have a legit source that says so or are you just a sellout ?

You must be on dope or dog food, this is exactly the evil of capitalism. Mortgage discrimination and redlining are not beautiful things.

Not only are you accusing your own of being liars and thieves you have no idea how economics works.

 

[William Joyce]

Racist BS trash, you racists whites are the ones with the problems, the rich whites have brainwashed you stupid crackers ino believe blacks and other minorities are the ones with problems when it is the *RICH* whites who are the problem thats making this country fail.While they[the rich greedy whites] on one hand pay the race card with idiots like you by making you think in your degenerate mind that because you are white you are superior and entitled to everything good on this earth they're busy robbing you blind on the other hand and manipulating idiots like you to point the finger at the wrong people. Despite the obvious truth, you stupid racist whites still think you have higher IQs yet don't have the intellectual capacity to see that you're getting duped.

Most rich people are not really working too hard to help whites generally. Bill Gates gives all his money to Africa, but not a dime for Appalacha.

 

[KittenKoder]

Racist BS trash, you racists whites are the ones with the problems, the rich whites have brainwashed you stupid crackers ino believe blacks and other minorities are the ones with problems when it is the *RICH* whites who are the problem thats making this country fail.While they[the rich greedy whites] on one hand pay the race card with idiots like you by making you think in your degenerate mind that because you are white you are superior and entitled to everything good on this earth they're busy robbing you blind on the other hand and manipulating idiots like you to point the finger at the wrong people. Despite the obvious truth, you stupid racist whites still think you have higher IQs yet don't have the intellectual capacity to see that you're getting duped.

Most rich people are not really working too hard to help whites generally. Bill Gates gives all his money to Africa, but not a dime for Appalacha.

Um ... though Bass is a complete moron, Bill Gates gives a very small portion of his donations to overseas organizations, unlike the "feel good" idiots most of hi donations stay right here in Seattle helping out our own. It's why I forgive him for the Windoze XP fiasco.