Posted on 10/19/2019 4:22:22 PM PDT by karpov
When tens of thousands of African-Americans held the keys to their first homes in the early 1970s as part of a new federal program that encouraged black homeownership, they thought they were about to fulfill the American dream. Instead they got an American nightmare.
The story begins with the urban uprisings of the late 1960s, which were reactions to decades of poverty, racism and a lack of opportunity. According to the Kerner Commission, a major cause was government-sponsored housing segregation that had confined African-Americans to rental housing in urban neighborhoods while subsidizing white flight to the suburbs. Black people, too, wanted to enjoy the benefits of homeownership and the uprisings pressured Washington to take that seriously.
Richard Nixon gave voice to a shift in government policy in 1968 when he declared that “people who own their own homes don’t burn their neighborhoods.” The Housing and Urban Development Act of 1968 created policies that let low-income black renters, long excluded from conventional mortgages and other standard ways of financing homes, become homeowners.
At the core of the law were three components: A down payment cost only $200; a buyer’s mortgage was linked to her income, not her house’s value; and the interest rate on the loan, subsidized by the federal government, was capped at 1 percent.
It was a boon — at least for banks and the real estate industry.
The Federal Housing Administration backed mortgages arranged through this program and bankers didn’t have to worry about foreclosures or defaults because if buyers fell behind on their payment, Washington would simply pay off the loan. An unprecedented number of black renters in Philadelphia, Detroit, Chicago and other urban centers became homeowners.
But the program was troubled from the start. The conditions that allowed for homeownership also set the groundwork for fraud.
(Excerpt) Read more at nytimes.com ...
Mandatory busing of school children. I take it you weren't around at the time.
The US government, in its infinite wisdom, decided that everywhere the black/white ratio of students didn't meet the proper number, white school children would be bussed away from their neighborhood schools to schools where there weren't enough white children. Many children who lived within walking distance of their neighborhood school were bussed, sometimes for an hour each way, to different schools. The only solution was to move to a different school system in the suburbs.
The statement that the "government subsidized" this is a lie. In most cases, the houses became worthless as everyone else was leaving, too, so the housed were abandoned. In Detroit, two of every three houses were abandoned. The owners got nothing.
And keep your property taxes current...
And the government had to jump through hoops to provide the mechanism for them to do that. The relaxing of lending standards and incentives to buy weak loans were forced on FNMA and FHLMC in order to convince banks to lend to people who didn’t have the means to pay them back.
Yep. Those Affirmative Action Mortgages
You can’t fool Mother Nature. Chiffon
The anger stems from insecurity and envy. It’s so much easier to blame others than to take responsibility for your own actions and your own life.
The goobermint paid whites to move to the suburbs? I do not think that word means what you think it means.
Once upon a time the chant was “banks unfairly deny mortgages to minorities”.Then came Attorney General Re No who announced that any bank that denies a mortgage to a “minority” will have the weight of the US Government fall on its head.Banks got the message. Then,about 15 years later,the chant changed to “predatory lending”.
Xit might identify as a Buick for all we know. And in that case, we’re definitely not allowed to question it.
HL Mencken was a socialist. But he was witty and skeptical.
NYT always has an ulterior motive with the goal of promoting global tyranny. Every article needs to be read with that in mind.
There were reams and reams written about how the packaged mortgages were AAA rated investments due to loan diversification and credit enhancements. In the beginning this was true because most of the underlying mortgages were not badly structured. It was when the mortgage market entered the “no doc” (no documents) stage that the Ponzi Scheme fell apart. Make no mistake, the seller of the Ponzi Scheme was none other than the U.S. Government run by the RATs.
Nobody can get it right. A family member worked for Habitat, where the houses were built for the “poor” and mortgages were tailored to their incomes, only a few hundred dollars a month...and most of them didn’t bother to pay, or paid seriously late.
They also couldn’t do things like tighten a screw to hold in a doorknob (in their own house, not a rental or public housing) and wouldn’t go to the free Home Depot “first homeowner” classes, tailored specifically to people who’d never been responsible for their own repairs before.
So what can you do. Barr was right, we’ve lost our religion, and with it, our sense of personal responsibility.
“When the Dream of Owning a Home Became a Nightmare”
It became a nightmare when we started paying illannoy real estate taxes.
The lesson seems to be that no matter what, anything bad that happens to black people just isn’t their fault—at least in the view of the New York Times.
Giving people homes that have no idea how to take care of them, and don’t ever want to put money into upkeep, is a recipe for disaster.
HOA fees used to be in addition to rent.
Now you often must pay a mortgage AND ever-increasing HOA fees, which can be as high as rent and never go away.
Nixon should have run as a Democrat. He certainly was dumb enough to qualify.
A truth is nothing generates new conservative voters faster than Democrats burning down their city.
“Banks were forced into making loans available regardless of the realities.”
That is just part of it. Many banks made the initial loans without underwriting and then sold them.
Reading this I immediately thought of ACORN.
The article is blocked from non-subscribers. So I don’t know what the rest of it says.
But, of course, already this thread is bringing up old arguments.
When the housing bubble burst in 2008, Republicans blamed the CRA, and Dems blamed so-called “predatory lenders.”
Everyone was pointing their fingers at each other.
No one wanted to admit the real reason for the 2008 Mortgage Crisis: People were buying houses (paying way too much for them) and borrowing against their houses over and over again because they thought the values would keep rising.
This article says the subprime mortgages didn’t even have much to do with the bubble bursting:
https://fortune.com/2015/06/17/subprime-mortgage-recession/
It’s sad when people lose their homes to tragedy. But, in 2008, it was all about people overpaying and borrowing. They thought the party would never end. Well, it did.
Given property taxes in Texas, you continue to rent after the mortgage is paid off.......
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