Posted on 10/02/2008 1:56:46 AM PDT by GVnana
How The Fed, Media And Academia Aided And Abetted Lending Debacle
By STEVEN MALANGA | Posted Wednesday, October 01, 2008 4:30 PM PT
In the early 1990s, I attended a conference designed to teach journalists the tools of an emerging field known as computer-assisted investigative reporting.
One of the hottest sessions explained how journalists could replicate stories that other papers had done locally using computer tools, including one especially popular project to determine if banks in your community were discriminating against minority borrowers in making mortgages.
One newspaper, the Atlanta Journal-Constitution, had won a Pulitzer Prize for its computer-assisted series on the subject, and others, including the Washington Post and Detroit Free Press, had also weighed in with their own analyses based on government loan data. Everyone sounded keen to learn if their local banks were guilty, too.
(Excerpt) Read more at ibdeditorials.com ...
I’m interested, but you posted a bad link.
Wow. OK. We will pause while he management addresses the issue!
Here you go lazy bones.
Took three clicks of a mouse.
http://www.ibdeditorials.com/IBDArticles.aspx?id=307752533636403
Apparently common decency is also uncommon with you. Now you have a great day!
Thanks for the post. It’s a good ‘un.
Thank you for the link. BTW, all of my threads are perfect [when I spell the headline correctly — {quick cough}.] FRegards ....
Weasel wording. The vast majority in number but especially in $$ were for the tract mansions in outer suburbs.
The real numbers (for 2006) are 60B CRA out of 1T alt-A and subprime. Granted a portion of the non-CRA were also targeted to deadbeats, but the numbers are still going to be in favor of overstretced people in tract mansions and "investment properties"
[snips from the piece]
One of the hottest sessions explained how journalists could replicate stories that other papers had done locally using computer tools, including one especially popular project to determine if banks in your community were discriminating against minority borrowers in making mortgages.
One newspaper, the Atlanta Journal-Constitution, had won a Pulitzer Prize for its computer-assisted series on the subject, and others, including the Washington Post and Detroit Free Press, had also weighed in with their own analyses based on government loan data. Everyone sounded keen to learn if their local banks were guilty, too. [snip]
... bank lending to minority borrowers still became an enormous issue ... Editorialists called for the government to force banks to end the alleged discrimination ... castigated federal banking regulators ... a Federal Reserve Bank of Boston study ... document produced by the Federal Reserve Bank of Boston in 1998 titled “Closing the Gap: A Guide to Equal Opportunity Lending.”
• It told banks they should consider junking the traditional debt-to-income ratio used by the industry to determine whether an applicant’s income was sufficient to cover housing costs plus loan payments. [snip]
• In cases where applicants had bad credit (as opposed to no credit), the Boston Fed told banks to “consider extenuating circumstances” that might still make the borrower creditworthy. [giant snip, but good reading]
” ... we made heroes out of those who led the way, like Angelo Mozilo, before we made villains of them.” [snip]
Good post, and it mentions a significant fact, which was that once banks relaxed standards for minorities, they decided they had to relax standards for everybody. This meant that many unqualified people were suddenly able to buy homes.
What the article doesn’t mention is that therefore the market was flooded with buyers and the prices of homes soared way beyond their actual value. I read a very good article by Victor David Hanson this morning in which he points out that people then started to regard homes as a speculative investment, buying homes with easy credit and flipping them rather than living in them, which did indeed drive the prices up and create a bubble. So it’s not just the banks, not just Wall Street, and not just the minorities who were the original beneficiaries of these policies, who are responsible for the implosion. Granted, this was all encouraged by a stupid government policy to begin with, but the fact is, greed and risky financial behavior wasn’t restricted solely to the people Freepers love to hate, Wall Street.
Thank you for the post. Added it to the Timeline:
http://www.freerepublic.com/focus/f-bloggers/2093845/posts
A bailout link list.
Once again, we are stuck paying for Liberal idiocy.
9/11, New Orleans, sub-prime mortgages, right there is ten trillion dollars worth of stupidity.
We can no longer afford Liberals.
“...Apparently common decency is also uncommon with you. Now you have a great day!...”
No, I’m into self reliance. It gets old trying to help up the whiners when they can easily do three simple little clicks.
Your response says more about you than about me.
Now you have a great day!
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