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

Originally posted by saltheart foamfollower
reply to post by NoHierarchy

 

So, a study done by the Woodrow Wilson school of progressives is attempting to blame the banking industry of giving loans to poor people.

Who's idea was this to begin with, OH YEAH, that would be the progressives. They forced banks to give loans to those that could not afford them, now this ignorant thinks they can label it as institutional racism.

What the did was give many to much of a loan. Giving folks big fat loans, no way they could pay on thier income instead of like you say getting a loan within their means.But this was the scam. WHy? They were making their money off the suckers that bought the loans. The suckers rightfully thought these loans had been properly prosessed but then found many were 200,000$ loans to a 40$ a year income. The crooks just used the poor as subject matter.

I will tell you though there were a lot of folks that also took advantage of this wide open loan window to get a loan within thier means that they couldnt have gotten under the strict traditional rules of loaning money that were in place before the flow. We moved out of a dump and within our means to a much much nicer place, on a traditional fixed loan, that we couldnt get the year before the crap hit the fan and loaning became easy. Most that got screwed got into ARM loans and /or just to much loan.

reply to post by Logarock


Excellent point. The idea that the generous loaners are without blame and this is solely stupid minorities wanting to live large and flush the American economy down the toilet is misguided and also somewhat revelatory of the mindset of the person holding said opinion. These banks engaged in criminal enterprise and used people as chess pieces to steal money from not just the borrowers, but all taxpayers.

Originally posted by NoHierarchy

Originally posted by Becoming
reply to post by NoHierarchy

 

They don't know how to pull themselves out of the hole they dug.

I grew up in a bad neighborhood, was very poor (5 of us in a one bedroom home), my dad was in prison 10 years of my life (from 5-15) and we managed to work hard (all of us) and move away from all of that crap.

Of course being the only white kid in a 4 block radius didn't help very much. You think blacks have it tough in a black neighborhood, try being a white kid in one.

Yes, I think it's a huge problem that poor people dont have the knowledge, resources, support, or leeway to pull themselves out of their holes. Are poor people also responsible for their own plights? Yes. Is it SOLELY their own fault? Hell no. Like I've said, the issues (even though they're made to be in so many despicable ways) are NOT black and white.

Also, we're not going to have a pissing contest over who has it worse in a black neighborhood. Sure it might've sucked for you and you might be bitter over it (I probably would be too), but that's not what we're talking about.

I'm sorry, but my family was poor (I told you that in the last post) and we lived in one of the neighborhoods you talk about. We pulled ourselves out by being dertermined to leave. Individual responsibility is what is lacking in todays world. You and everyone else like you are to quick to tell lazy a holes that its not their fault they are poor.

As for knowledge, support, resources and leeway.

We poor people have as much of those things as the rest of America. Its just that most of them are to lazy living on welfare to take advantage of them.

Why get a job and work hard when the government will send you a check, right?

I will admit the SOME banks and individuals made money off of this scam, hell that is something that can even be done on a declining market.

Certain banks knew that these loans would never bring in revenue, that was not their primary avenue for income generation though. The mortgage bundling was where they made their money. Creating the derivatives and then dumping them on the open market for all to buy.

I just find it obfuscational that first the government created the environment where they forced the banks to give loans to high risk individuals, then the government comes back and states the banks caused the entire problem.

So the whole thing here comes to this, the government requires the banks to make risky loans, the banks hedge their obvious losses by creating the derivatives and dumping them on the market. The derivatives cause the systemic economic debacle and the banks are vilified?

Kind of reminds me of blaming the victim of a mafia scam.

reply to post by saltheart foamfollower
Ok so we have a bunch pointing the finger at each other over this. So follow the money I am thinking here. The banks were "forced" to make loans and then "forced" to take the bail outs. Look at all of the smaller bank chain failures that were bought out by larger firms with bail out money under the guise or having to step in and save the day from a manufactured crisis. Its as though these small banks were foced to destroy themselves and then forced into selling out.

reply to post by Logarock


So what are you saying?

Myself I have been saying that private institutions, since Clinton instituted the removal of the asset requirement, that the whole thing was inevitable.

Are you going to tell me different?

reply to post by NoHierarchy


One has to look at who made this type of lending possible. If Fannie Mae and Freddie Mac weren't allowing these subprime mortgages in the first place, this mess would have been adverted or greatly diminished. Who allowed Fannie and Freddie to do this???? Look at whose names are on the Nov. 2nd Ballot. Congress were the people who poured the gasoline on the mortgage industry and then gave them a match to use as well. I find it sickly humorous how Congress tries to pull the "it wasn't me" routine. Without Congress mandating looser lending from Fannie and Freddie, this disaster doesn't happen in the first place. Congress is the #1 enabler of this whole mess.

reply to post by saltheart foamfollower

I am saying that inevitable was part of a larger long term plan. What happend to all the profits from these bundle sales?

reply to post by Logarock


Asking the wrong question, IMO.

What were the banks "supposed" to do? Go under?

Was that the intention? Was the intention to make these banks go under or was it something else?

Originally posted by Asktheanimals
Here's proof that racism cuts both ways. From their report:

Before the subprime boom, black borrowers were more likely to be denied loans overall, especially in white areas, whereas whites were often denied loans in minority neighborhoods (Holloway 1998).

Well from what I've read of the article, the Whites denied loans in Black neighborhoods were lucky then. Considering that those lenders were actually predatory.

Perhaps they were even looking out for them because in the end, the people who took those loans in Black neighborhoods were inevitably screwed.

- Lee

Originally posted by adifferentbreed
reply to post by NoHierarchy

 

Throwing good money after bad is always a waste...........

So it's better to exploit the bad then to make yourself that much richer?
Sounds pretty insidious and evil to me.

- Lee

reply to post by lee anoma


What is someone with capital supposed to do, give a loan to someone that is going to fail?

I mean, I could start a business making pet rocks, but if no one wants the rocks I am providing, what are you going to do? Make people buy them?

Here you go, I am providing a bunch of worthless junk, have fun with them. Whatever the hell they are.

Sorry, you have to understand basic economics. You cannot force people to buy something they do not want. Unless of course it is a communist system.

Originally posted by NoHierarchy
Seriously people, we're not talking about whether or not it's all black peoples' fault for the troubles they face or whether it's tough being a white kid in a black neighborhood. We're talking about banks preying on those in poverty, and specifically targeting based on race... so, please stick to the actual topic.

It is NOT black peoples' fault that banks are preying on them and segregating them in secret, BOTTOM LINE.

I am so glad you pointed that out.

Around these parts people are quick to jump on Banks for their duplicitous behavior, outright theft, and manipulative practices perpetrated against their members, but it seems when it comes to their actions against the lower class Blacks and Latinos, it's suddenly the lower classes fault for letting the banks rob them blind.

It's okay to steal from them because they are uneducated and at-risk cases?



I can't believe people would even side with the lenders on such an issue, unless they really despise the poor.

When the banks shaft the middle-class in a different way though, people at ATS want to burn down Bank of America.

It's engineering a loan to fail on a certain segment of America through ridiculous fees and outrageous penalties that the borrower won't be able to afford eventually.

It's not okay to do this, people.

- Lee

reply to post by NoHierarchy


Well now I know why I couldn't get a mortgage when seemingly everyone under the sun regardless of their credit history was getting them! ! Because they were aimed at minorities!!! I tried to get a HUD loan and was denied, I always knew it was cause I was white...And at the time I made pretty well plenty enough to cover the loans. Well whatever thehy were targetting certain groups guess I didn't fit their target.

Originally posted by saltheart foamfollower
reply to post by lee anoma

 

What is someone with capital supposed to do, give a loan to someone that is going to fail?

That is exactly what they did do.
Didn't you read the article?

They gave them the loans so they would fail.
They then take collateral or what have you and leave the borrower in debt.

Why else would they give a loan to someone they know won't be smart enough to understand what they are getting into, who would have trouble paying it back, then slowly increase payment amounts through high interest rates, and tack on a bunch of other fees?

The lenders aren't innocent victims, hence the term "predatory lending".

They know exactly what they are doing.

- Lee

reply to post by lee anoma


Did they do it intentionally or by the direction of the Congress?

Hmmm, seems to me that it was intentional.

Oh well, blame the banks.

Originally posted by saltheart foamfollower
reply to post by Logarock

 

Asking the wrong question, IMO.

What were the banks "supposed" to do? Go under?

Was that the intention? Was the intention to make these banks go under or was it something else?

Its hard to tell unless we find who was profiting. It looks like a bunch of mad cows were running the show. Had they simply lightend restrictions and made sure borowers were not getting into to much loan and sold traditional fixed rate loans then the problems would have been much less. But it looks like crazy used car salesmen were running the show putting folks into ARMS on loans that the amount of which were out of the borowers capacity to handel even at a fix traditional 30 year loan. It was pure maddness.....or a big rip off transfer scam not transfering to the poor but to the coffers of rip off artist. The big factors driving these loans were the hign $ the brokers were getting in commision? So no matter what happened the brokers could walk away loaded. But thats just one aspect, turning sharks lose to "push" the loans. Then the higher ups sold this crap in "bundels" to the unsepecting buyers. Looks like someone in the middle playing both ends the dumbass.

And I dont know why were are talking about blacks here as primary victims. Whites represent the much higher presentage taken in this scam.

We had 3 transfers of wealth here, one from the banks to the sellers, then wealth transfered from the buyers of bundles to the sellers of same and then the gov bail out transfer. Now are we going to set here and blame poor stupid american dream driven, crap finacial acumen, dead end job joe blow without a pot to piss in for this mess? He was just the pivot guy in this jerk off.

Originally posted by lee anoma

Originally posted by NoHierarchy
Seriously people, we're not talking about whether or not it's all black peoples' fault for the troubles they face or whether it's tough being a white kid in a black neighborhood. We're talking about banks preying on those in poverty, and specifically targeting based on race... so, please stick to the actual topic.

It is NOT black peoples' fault that banks are preying on them and segregating them in secret, BOTTOM LINE.

I am so glad you pointed that out.

Around these parts people are quick to jump on Banks for their duplicitous behavior, outright theft, and manipulative practices perpetrated against their members, but it seems when it comes to their actions against the lower class Blacks and Latinos, it's suddenly the lower classes fault for letting the banks rob them blind.

It's okay to steal from them because they are uneducated and at-risk cases?

I can't believe people would even side with the lenders on such an issue, unless they really despise the poor.

When the banks shaft the middle-class in a different way though, people at ATS want to burn down Bank of America.

It's not okay to do this, people.

- Lee

And the middle class did get burnt up in this. If not on the loan end then on the other end when their property value went down and their portfolio, 401s and all whent into the crapper. Whites and blacks eat from the same troff on this one. It looks like somebody wants to blame blacks as easy fall guys and whites need not buy into this. I would say that for every black that took one of these dream loans there were 5 whites that took the same road here.

Originally posted by NoHierarchy
Seriously people, we're not talking about whether or not it's all black peoples' fault for the troubles they face or whether it's tough being a white kid in a black neighborhood. We're talking about banks preying on those in poverty, and specifically targeting based on race... so, please stick to the actual topic.

The problem, however, is that blacks have a higher statistical poverty rate than whites. They also have statistically higher rates of drug use, crime, single-parenthood, etc. In theory - members of this demographic should be disqualified from loans more often. However, this is obviously not the case. Why? Racism? Predatory lending?

I am going to ask you to use logic, facts, and to implement basic concepts of business - please prepare yourself accordingly.

We need to look no further than the equal housing acts and other civil rights acts: www.hud.gov... . Before you get all in a huff - I don't give a damned about the color of someone's skin, or whether or not you think discrimination is/was/will be a problem. There are raw mathematical implications to the provisions within these laws - specifically, that people within a certain qualifying demographic being granted a loan relieve the bank of financial responsibility for the loan - IE - the government will cover their loan in the event they are unable to pay it.

Stop and think about this a minute. There is no longer any penalty to the bank for issuing a loan to someone they would normally never lend to because they are a high-risk loan. Now, however, the government has said "It's okay - we'll just fire up the printing press if they default." Normally, a bank has to be financially responsible for all of its assets - it cannot loan more money than it has, or have liability assets that exceed their capital reserves.

See the problem?

It's nothing to do with race, and everything to do with the government attempting to give everyone a nice place to live without realizing that someone is going to have to actually subsidize the higher standard of living being sought. Furthermore, the manner in which this was implemented allowed for rapid inflation of the value of the housing market (many people were looking for homes since they could now qualify for loans through government programs - artificially driving the price of all other markets higher - supply and demand, kiddo). However, banks didn't loan to the newly qualified demographics for a reason - they are high-risk loans and an unacceptable percentage of them default. Someone has to pay the piper when that happens - and the longer it builds up, the bigger the bubble will be when it bursts.

It is NOT black peoples' fault that banks are preying on them and segregating them in secret, BOTTOM LINE.

Except the banks aren't preying on them. They are now capable of making a profit on a demographic they were previously not able to, thanks to government assistance programs. If the people default on the loan - the government programs take over and shelter the bank from financial repercussions. There is the potential for gains with no risk of loss on behalf of the bank. It's not the bank's responsibility to make sure you can pay your loan - their responsibility is to determine whether or not they can afford the risk of giving you the loan - since the government removed the risk, you are now completely and singly responsible for your own financial analysis if you fall within the qualifying demographics for these programs.

There is a terrible/insane culture of blaming the victim in this country and I'm far beyond sick of it. If you can't muster the simple common sense/empathy to side with a victim and criticize a victimizer then you don't have a legitimate role in the discussion. Don't let ideology cloud the truth.

This has nothing to do with being a victim or a victimizer. The law is there for a reason - to ensure people can get a loan for a house and improve their standard of living. The law then stipulates the people can keep their house and be rid of financial responsibility (in many cases). The banks are compensated accordingly. Sure - you have to declare bankruptcy, but all of these 'victims' are protected under the law, provided they seek its assistance. The bank is then compensated accordingly.

You're letting your emotions get the better part of you. Sure - there is still racism out there, but the loan officer doesn't give a damned about what color you are - they see a customer/potential sale, at the very basic and most minimal level. Government assistance is another tool for them to use to squeeze you in under the bar for their bank's qualifying standards. Many will enact their human compassion and tell you when you're probably going to be in over your head with loan payments - but they are not going to refuse a loan that pans out to all gains and no risk.

If anyone is the victimizer - it is the government assistance programs. They were a well-intended idea - but they are poorly implemented and have an overall opposite effect of their original intent. By sheer logic they should be repealed and new legislation drafted in light of the lessons learned with this legislation.

Not that I expect you to agree with me or apply logic in disagreement.

Originally posted by NoHierarchy

Originally posted by adifferentbreed
Again, this has nothing to do with race.....................
If you can't afford it, don't buy it.
If you buy a house you can't afford, who's fault is it......................at the end of the day, it's yours.
Foisting the blame off on the bankers is a joke, they didn't go round up anyone and force them to take a loan.
As far as the longest running slavery.............um, think ya might be mistake there.

How many times do I have to say- IT'S NOT THAT SIMPLE. You don't seem to have any clue about the people you're talking about, the circumstances involved, and the predatory/deceptive practices that serve to screw people over.

Yeah... guess you're right, the bankers are innocent angels who are OH SOOOOOO oppressed by taxes and regulations and it's those damn minorities and poor folks who are oppressing everyone else. I hope you are totally screwed over by a bank, corporation, or other private institution so you'll learn that even people who believe they're doing the right thing can get totally screwed by advertising, salesmen, legal loopholes, fine print, and the hidden fist of the market.

That is usually what it takes for people to understand the situation better and get their collective heads out of their @$$3$.