Racial predatory loans fueled U.S. housing crisis: study

Discussion in 'Race Relations/Racism' started by Bass v 2.0, Oct 4, 2010.

  1. Bass v 2.0
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    Bass v 2.0 Biblical Warrior For God.

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  2. Stephanie
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    Stephanie Diamond Member Supporting Member

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    OmfriggenGawd..

    so in other words you all are saying these people WERE TOO STUPID to realize just what it was they were signing onto..
    and of course what is the Democrats and lefties solution for this.........the GUBERMENT MUST STEP IN to take care of all them STUPID PEOPLE....LOL
     
    Last edited: Oct 4, 2010
  3. Conspiracist
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    Conspiracist Snuggle weather rocks!

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    First and foremost, there are many people raised by poor parents who do not know how to manage money. Most of us learn by example and when we grow up knowing our parents are not a good example we figure out we have to "wing it". Taking schooling is not always an option when you are busy trying to keep a roof over your family's heads. You sit down with people who you hear are there to help you and tell you what is right and wrong and you follow their advice. Being a lower middleclass American you see yourself as now doing better than your parents in owning a house.

    As to the OP, this was not a racially motivated action, it was aimed at the poor and lower middle class. It just so happens that the majority of the black race fell into that category.

    Again to the OP: Who the fuck has been helping you with your grammar? When you went as Charlie Bass your grammar sucked big time.
     
  4. PoliticalChic
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    PoliticalChic Diamond Member

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    The road to hell is paved with good intentions.


    In contrast to what FDR called “the conservative party,” which “honestly and conscientiously believes” that “in the long run, individual initiative and private philanthropy can take care of all situations,” the “liberal party is a party which believed that, as new conditions and problems arise beyond the power of men and women to meet as individual, it becomes the duty of the Government itself to find new remedies with which to meet them.” James P. Young, “Reconsidering American Liberalism: The Troubled Odyssey of the Liberal Idea,” p. 171
    (emphasis mine)

    With due respect to FDR, " the GUBERMENT MUST STEP IN to take care of all them STUPID PEOPLE....LOL"...it seems they have yet to find said remedy.
     
  5. IanC
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    IanC Gold Member

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    I wish the old MSN message board didn't remove their archives when they closed down. This was discussed pretty thoroughly at the time of the economic collapse.

    Govt and special interest groups basically forced the banking industry to hand out loans to minorities, whether they were qualified or not. As always, when artificial conditions are imposed, some people find a way to make big money on them. In this case it was derivitives backed by Fanny Mae and Freddy Mac. But it wouldn't have happened without the necessity of lowering standards to get minorities into the housing market.
     
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  6. PoliticalChic
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    PoliticalChic Diamond Member

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    Does this help....

    a. Congress passed a bill in 1975 requiring banks to provide the government with information on their lending activities in poor urban areas. Two years later, it passed the Community Reinvestment Act (CRA), which gave regulators the power to deny banks the right to expand if they didn’t lend sufficiently in those neighborhoods. In 1979 the FDIC used the CRA to block a move by the Greater NY Savings Bank for not enough lending.

    b. In 1986, when the Association of Community Organizations for Reform Now (Acorn) threatened to oppose an acquisition by a southern bank, Louisiana Bancshares, until it agreed to new “flexible credit and underwriting standards” for minority borrowers—for example, counting public assistance and food stamps as income.

    c. In 1987, Acorn led a coalition of advocacy groups calling for industry-wide changes in lending standards. Among the demanded reforms were the easing of minimum down-payment requirements and of the requirement that borrowers have enough cash at a closing to cover two to three months of mortgage payments (research had shown that lack of money in hand was a big reason some mortgages failed quickly).

    d. ACORN then attacked Fannie Mae, the giant quasi-government agency that bought loans from banks in order to allow them to make new loans. Its underwriters were “strictly by-the-book interpreters” of lending standards and turned down purchases of unconventional loans, charged Acorn. The pressure eventually paid off. In 1992, Congress passed legislation requiring Fannie Mae and the similar Freddie Mac to devote 30 percent of their loan purchases to mortgages for low- and moderate-income borrowers.

    e. Clinton Administration housing secretary, Henry Cisneros, declared that he would expand homeownership among lower- and lower-middle-income renters. His strategy: pushing for no-down-payment loans; expanding the size of mortgages that the government would insure against losses; and using the CRA and other lending laws to direct more private money into low-income programs.

    f. Shortly after Cisneros announced his plan, Fannie Mae and Freddie Mac agreed to begin buying loans under new, looser guidelines. Freddie Mac, for instance, started approving low-income buyers with bad credit histories or none at all, so long as they were current on rent and utilities payments. Freddie Mac also said that it would begin counting income from seasonal jobs and public assistance toward its income minimum, despite the FHA disaster of the sixties.

    g. Freddie Mac began an “alternative qualifying” program with the Sears Mortgage Corporation that let a borrower qualify for a loan with a monthly payment as high as 50 percent of his income, at a time when most private mortgage companies wouldn’t exceed 33 percent. The program also allowed borrowers with bad credit to get mortgages if they took credit-counseling classes administered by Acorn and other nonprofits. Subsequent research would show that such classes have little impact on default rates.

    h. Pressuring nonbank lenders to make more loans to poor minorities didn’t stop with Sears. If it didn’t happen, Clinton officials warned, they’d seek to extend CRA regulations to all mortgage makers. In Congress, Representative Maxine Waters called financial firms not covered by the CRA “among the most egregious redliners.”

    i. Mortgage Bankers Association (MBA) shocked the financial world by signing a 1994 agreement with the Department of Housing and Urban Development (HUD), pledging to increase lending to minorities and join in new efforts to rewrite lending standards. The first MBA member to sign up: Countrywide Financial, the mortgage firm that would be at the core of the subprime meltdown.

    j. A 1998 sales pitch by a Bear Stearns managing director advised banks to begin packaging their loans to low-income borrowers into securities that the firm could sell. Forget traditional underwriting standards when considering these loans, the director advised. For a low-income borrower, he continued in all-too-familiar terms, owning a home was “a near-sacred obligation. A family will do almost anything to meet that monthly mortgage payment.” Bunk, says Stan Liebowitz, a professor of economics at the University of Texas: “The claim that lower-income homeowners are somehow different in their devotion to their home is a purely emotional claim with no evidence to support it.”

    k. Any concern was quickly dismissed. When in early 2000 the FDIC proposed increasing capital requirements for lenders making “subprime” loans—loans to people with questionable credit, that is—Democratic representative Carolyn Maloney of New York told a congressional hearing that she feared that the step would dry up CRA loans. Her fellow New York Democrat John J. LaFalce urged regulators “not to be premature” in imposing new regulations.

    l. In July 1999, HUD proposed new levels for Fannie Mae’s and Freddie Mac’s low-income lending; in September, Fannie Mae agreed to begin purchasing loans made to “borrowers with slightly impaired credit”—that is, with credit standards even lower than the government had been pushing for a generation.

    m. In 2004 Congress pressed new affordable-housing goals on the two mortgage giants, which through 2007 purchased some $1 trillion in loans to lower- and moderate-income buyers. The buying spree helped spark a massive increase in securitization of mortgages to people with dubious credit.
    Obsessive Housing Disorder by Steven Malanga, City Journal Spring 2009
     
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  7. California Girl
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    California Girl BANNED

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    Apologies that the following is from a 'conservative' source but factually it is accurate.

    Obama ACORN Trust, But Verify

    How did we get into this financial mess in the first place? Well, to a large degree, it’s because lenders gave mortgages to borrowers who were unqualified, who shouldn’t have been given loans in the first place. Why did they do that?

    Here’s the start of an article in the ‘Chicago Sun-Times’ from April 1995: “You’ve got only a couple thousand bucks in the bank. Your job pays you dog-food wages. Your credit history has been bent, stapled, and mutilated. You declared bankruptcy in 1989. Don’t despire: You can still buy a house.” That article then suggested that people wanting to buy homes who fit this profile go see a group called ACORN.

    Obama at the time had his hands on the purse strings of two organizations. He was a director of the Woods Fund, and he was Chairman of the Board of the Chicago Annenberg Challenge (CAC). He gave money from both organizations to ACORN, and also provided training for ACORN workers.

    According to Stanley Kurtz of National Review Online, “ACORN succeeded in drawing Fannie Mae and Freddie Mac into the very policies that led to the current disaster.” ACORN put pressure on banks by threatening them with accusations of racism if they didn’t give loans to minorities, even if they were completely unqualified.

    Starting in 1987, ACORN began pressuring Fannie Mae and Freddie Mac to lower their standards for assuming mortage debt. And eventually they succeeded. By 1995, then President Clinton touted the fact that home-ownership in America was at an all-time high. According to Kurtz, ACORN representatives were guests of honor at this ceremony
     
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  8. Big Black Dog
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    Big Black Dog Gold Member Supporting Member

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    Once again, the poor black man has been taken advantage of by white guys... What a crock of shit this thread is. If the standards had not been lowered to allow people to buy something they couldn't afford in the first place - regardless of their skin color - then this would not have happened. Besides, aren't people smart enough to know when and how to borrow money without being raped financially? What I hear you saying is that a bunch of dumb ass black people were taken advantage of by the white banking people. Well, duh... Whose fault is that? Ever hear of PERSONAL RESPONSIBILITY?
     
  9. PoliticalChic
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    PoliticalChic Diamond Member

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    I don't want to miss a chance to add my pet peeve, Andrew Cuomo, to the mix:

    "Andrew Cuomo, the youngest Housing and Urban Development secretary in history, made a series of decisions between 1997 and 2001 that gave birth to the country's current crisis. He took actions that—in combination with many other factors—helped plunge Fannie and Freddie into the subprime markets without putting in place the means to monitor their increasingly risky investments. He turned the Federal Housing Administration mortgage program into a sweetheart lender with sky-high loan ceilings and no money down, and he legalized what a federal judge has branded "kickbacks" to brokers that have fueled the sale of overpriced and unsupportable loans."
    Andrew Cuomo and Fannie and Freddie - Page 1 - News - New York - Village Voice
     
  10. Liability
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    Liability Locked Account. Supporting Member

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    Dear Black People of America:

    We are very very sorry. We thought we were helping by playing Robin Hood. But the Basshole has set us straight. Now we begin to (dimly) appreciate that we were wrong to try to help the plight of black Americans by making it so easy for financially unqualified people to obtain loans they had no Earthly prospect of being able to repay. This led to the hideously oppressive state of affairs known (misleadingly) as "home ownership." How COULD we have been so evil?

    And then, inexorably, it led to the loss of those very same "homes" which the borrowers clearly couldn't afford in the first place. And evictions and foreclosures made the unqualified borrowers and "home owners" feel badly. Entirely our fault. We suck. We couldn't possibly suck any more or any more badly.

    Please accept our unqualified apologies.

    Did we mention that we suck?

    Sincerely yours,

    Liberal White America (proprietors of "White Guilt R Us") and the Democrat Party.
     

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