Posted on 05/31/2015 2:53:23 PM PDT by PROCON
The mortgage crisis that brought the economy to its knees seven years ago was especially devastating for black communities, where homeowners who qualified for safe, traditional mortgages were often steered into ruinously priced loans that paid off handsomely for brokers and lenders while leaving borrowers vulnerable to foreclosure. The crisis left many middle-class minority communities strewn with abandoned houses, further widening the already huge wealth gap between African-Americans and whites.
A study published this month in the journal Social Problems lays out how this happened in Baltimore in the run-up to the recession and comes at a time when the banking industry and its friends in Congress are fighting proposed federal rules that would make it much easier to ferret out discrimination and enforce fair-lending laws.
The research, by the sociologists Jacob Rugh, Len Albright and Douglas Massey, focuses on 3,027 loans made in Baltimore from 2000 to 2008 by Wells Fargo, which in 2012 agreed to pay $175 million to settle allegations of predatory lending in Baltimore and elsewhere. The study takes into account credit scores, income, down payments all of the information that was available to brokers and lenders when these loans were made.
(Excerpt) Read more at nytimes.com ...
Yes indeed, and in fact... they did this in order to make loans more accessible to minorities.
I see what you did there, using the insulting term for Barney Frank’s boyfriend. But you are literally correct in that description LOL.
Tell it, brother.
Most people don’t get what happened, or how important it was.
I'm calling possible BS on this one. I'm sure there are people who'd do this (regardless of the race of the borrower), but someone across town will give you the best deal your credit will qualify you for. I'm sure there are cases where this happened to blacks, but till I see some real statistics, I'm not convinced this was done to minorities any more than it was done to whites, given equal credit histories.
or too stupid to hire a lawyer for $500 to advise them...
I'd just as soon not know where Barney Fag's hands have been, thank you.
These borrowers weren't steered away from "safe, traditional" loans because they weren't qualified for them in the first place. They were sub-prime borrowers, at best, and many of them had no place borrowing $$ (either on a purchase or refi). NINA loans (no income, no asset verification) were a joke.
Also, during this 2nd time period in the mortgage business, I never once met a borrower in person. It was all done over the phone & via the mail, so I never knew (or cared) what their ethnic background was. (Yes, it was a section on the last page of the app, but it's not something to which I paid any attention - it would've been illegal & discriminatory if I had.)
You are correct sir! You also should mention bow Rainbow Push and other groups extorted banks to make loans to unqualified minority borrowers. And the banking examiners looked the other way.
I'd just as soon not know where Barney Fag's hands have been, thank you
someone told Barney to "Belt Up"
Only the government is permitted to engage predatory lending. (What is the national debt now?)
Yep—that’s a true, though the mortgage banks piled on by also fraudulently selling a lot of bad, bundled/securitized mortgages into the private market, too.
OMG?
or BFD?
This is exactly right. Bank of America pulled out of our state because they couldn’t afford to continue to make the bad loans that were required by the feds under the CRA in order to continue to do business.
A lot of those mortgage companies were actually run by blacks. I sold my house to a (nice) black family and they used a minority mortgage company that didn’t know its a-hole from breakfast and caused a major delay in the closing. That p*ssed me off, but the buyer had it worse - he was running around with his furniture in a truck for days because of it. I ended up letting him put it in the garage before the sale closed.
CRA and HUD enforcers (headed by Andrew Cuomo) forced mortgage companies to make sketchy loans and FNMA and FHLMC scooped them up.
And, as another poster pointed out, nobody was forced to take out these mortgage.
Since when does one’s credit report rely on skin color? If I had gobs of money to lend out I would only lend to people who are likely to pay me back, otherwise I’d be a poor and failed businessman.
And let me guess, black families that pay their bill sand live within their means somehow were able to keep their homes and borrow more at better rates, news at 11.
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