One giant mortgage crisis wasn't enough

This is obviously blatant, intentional destruction of capitalism.

When these socialist policies fail, they have their scapegoat, blame capitalism. With the socialist MSM controlling and promoting this misinformation agenda, they are unstoppable.

Where are the socialists responses here promoting, spinning and denying the obvious outcome?

Raze, pillage and plunder until everything is destroyed, but it sure is fun while it lasts.

 

Ironically, it's a result of capitalism "working as intended", and a little bit of heart left in Man. Tiny differences in starting conditions result, without outside interference, in big differences in outcomes. Thus, we're developing a two-tier society with all the problems that those inevitably have. A little bit of "heart", of caring about the losers, is met with derision.

 

This is incorrect... The mtge industry, including the banks, would love the public to believe this, but there's all sorts of evidence to the contrary. The banks and their lobbyists have pulled out all the stops to shift the blame for the crisis onto anyone but the banking industry.

 

Dodger, formerly phenomena, is practically aware of only one underclass, our own, which is largely African American. Not being aware of the racial background of other underclasses around the world, he is unable to "control" for race in his calculations. Thus, he's comfortable using race as the cause of undesirable societal conditions for at least two reasons. One, it's easy. Two, it does not challenge any of this other values, particularly those having to do with economics. If he was able to make any money, or able to move to a better area, or both this would be a non-issue for him, like the plight of honeybees, for example--we read about it, but we don't lose any sleep over it.

 

Sounds very much like a communist plan. Destroy capitalism, growth. Then turn around and blame capitalism. I don't think so. Blame Fed and the grubbing government. There is one problem here with the communist plan. These animals you are using to take us down will never get a job, they crap on public beaches lol. Not going to work cabal apologist. No one's "heart" is that big, to kill ourselves for no good reason. You should have tried using middle class, but they are your historical enemy.

You say they should place the blame on banks for these savages. I say you use these savages to ruin freedom. If you are a US citizen please refrain from ever celebrating fourth of july. A flag should shoved up ur ass. If your one of those I have no border tribesman, again a US flag should be shoved up your ass.

 

"Growth" is not enough, tumors grow.

 

Huh? You OK there, my man?

 

If we truly had free market capitalism, the system would have been able to correct itself, numerous times, instead of the government, and the fed continuing to make the bubble bigger and bigger, and till there is no other option but for a colossal down turn. Plus you had the government, actually forcing people to make risky loans, which only served to exaserbate the problem.

If we had a free market, maybe the bankers would have had some fear and would not have taken on insanely risky positions knowing the government would not let them fail.

You think that this was bad, wait till you see the next time, we just removed any fear from the equation for the banks, not only were businesses not allowed to fail, no one even went to jail.

 

I think Holder is looking to see if banks are denying people who qualify under CRA terms.

Facts and reality: The Community Reinvestment Act and the Recent Mortgage Crisis

Some critics of the CRA contend that by encouraging banking institutions to help meet the credit needs of lower-income borrowers and areas, the law pushed banking institutions to undertake high-risk mortgage lending. We have not yet seen empirical evidence to support these claims, nor has it been our experience in implementing the law over the past 30 years that the CRA has contributed to the erosion of safe and sound lending practices. In the remainder of my remarks, I will discuss some of our experiences with the CRA. I will also discuss the findings of a recent analysis of mortgage-related data by Federal Reserve staff that runs counter to the charge that the CRA was at the root of, or otherwise contributed in any substantive way, to the current subprime crisis.

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The Fed, FDIC, MBA, etc.. all say the same thing, empirically the CRA did not cause or contribute to the financial crisis.


The problem with the article is that it's from IBD who that said Stephen Hawkings would be dead if he lived in the UK with that evil socialized medicine. There is probably intentionally missing facts.

 

"The foreclosure crisis that plagues the United States disproportionately affects
minority borrowers. African American and Latino borrowers with incomes
and credit scores similar to those of white borrowers receive far less
favorable loans, commonly referred to as subprime loans,1 and are often
charged exorbitant fees that lenders tend not to charge to white borrowers.
These subprime loans typically begin with a reasonable interest rate, but then
skyrocket, or, as the banking industry euphemistically says, “adjust,” to a far higher rate, causing the borrower’s monthly payments to soar. As monthly
payments increase, many borrowers quickly fall into default on their mortgages
and eventually fall victim to foreclosure.
A host of non-profit organizations, civil rights attorneys, and government
agencies have brought race discrimination claims against subprime lenders
under the Fair Housing Act (“FHA”) and the Equal Credit Opportunity Act
(“ECOA”), arguing that lenders treated minority borrowers less favorably than
white borrowers with similar risk-related credit characteristics. Plaintiff borrowers
have argued that the lenders’ practices and policies, though neutral on their face, have had an unjustifiably disparate impact on African American and
Latino borrowers.
(SNIP)


"The President of the National Urban League called on
Treasury Secretary Henry Paulson “to refute statements by conservative politicians
and pundits that subprime mortgages provided to minorities led to the
financial crisis and a $700 billion federal rescue of Wall Street,” calling such
allegations a “big lie.” Daniel Gross responded, “Let me get this straight.
Investment banks and insurance companies run by centimillionaires blow up,
and it’s the fault of Jimmy Carter, Bill Clinton, and poor minorities?” Gross
blamed the crisis on “stupid, reckless lending, of which Fannie Mae and Freddie
Mac and the subprime lenders were an integral part.” As he saw it, “Investment
banks created a demand for subprime loans because they saw it as a
new asset class that they could dominate. They made subprime loans for the
same reason they made other loans: They could get paid for making the loans,
for turning them into securities, and for trading them—frequently using borrowed
capital.”
Several aspects of the CRA belie the conservative pundits’ theory that liberal
lending mandates, as opposed to bad business decisions, were the cause of the
mortgage foreclosure crisis. As a principal matter, a large number of subprime
loans are not even covered by the CRA and thus could not have been coerced
by CRA requirements. In fact, by some estimates up to three-quarters of sub-prime loans fell outside the range of the CRA. Tellingly, lenders covered by
the CRA engage in high-cost loans at lower rates than those outside the CRA’s
reach. Further, the subprime crisis did not begin until a quarter century after
the enactment of the CRA, and Congress weakened the CRA regulations in
late 2004 to exclude small and mid-sized banks from its more stringent requirements
- yet the subprime market continued to grow. The number of high-cost
loans provided to individuals who could not afford them seems then to stem
more from a combination of bad business decisions on the behalf of lenders and
a failure of the federal government to adequately regulate the residential mortgage
market.
We do not dispute that the CRA was likely enforced in an imperfect manner.
We believe, however, that conservative pundits tend to make little effort to
distinguish between pressure exerted by legislators to encourage, or even force
lenders to increase lending to minority borrowers, and independent predatory
lending practices by lenders, based not on undue pressure from legislators and
community groups (i.e., ACORN), but on the lenders’ own business interests
and poor decision making.


(SNIP)



While the subprime crisis affects individuals of all races, it has been a catastrophe
for African Americans and Latinos. The CRL conducted one of the
most comprehensive studies on the subject by using HMDA data combined
with a “large, proprietary subprime loan dataset.” The study found that, de
pending on the type of loan, African American and Latino borrowers were anywhere
from 6% to 142% more likely to receive a higher-rate loan than white
borrowers with similar qualifications.
According to the CRL study, the racial disparity in subprime lending has not
been strictly based on borrowers’ income-levels or risk-related credit factors.
The study breaks down its data by LTV, FICO credit score range, and race.
In the highest-risk borrower category—featuring an LTV of above 90% and
FICO score below 620—African Americans were only 6% more likely than
white borrowers to receive a subprime loan for a home purchase and 5% more
likely to receive a subprime loan for refinancing. For borrowers with the
best credit histories and thus the lowest risk categories—LTV below 80% and
FICO score of above 680—African Americans were 65% more likely to receive
subprime loans than their similarly situated white counterparts for a home
purchase and 124% more likely when refinancing. Beyond the clear racial
disparities in lending, the increased disparity in refinancing is particularly unsettling
as minorities who refinance with subprime loans are at risk of losing
the equity that they have invested in their homes, often comprising their life
savings.
The Federal Reserve Board’s report on the HMDA data found similarly concerning
statistics. On average, 53.7% of African Americans received high
cost home purchase loans compared to 17.7% of whites, and only one-sixth of
the 36% difference appeared to be based on legitimate “borrower-related factors.”
Similarly, when refinancing, high cost loans were issued to 52.8% of
African Americans as compared to 25.7% of whites, with only one-ninth of the
27% difference based on legitimate “borrower-related factors.” A significant
portion of this disparity is thus found in factors unrelated to the borrower’s risk
of default, which is theoretically the only factor that should matter. Interestingly
enough, controlling for the lender accounted for a much more significant part of the difference in both cases. In other words, the disparity is
much more closely related to factors relating to a bank’s lending practices than
to factors associated with the borrower.
An ACORN study analyzing the 2006 HMDA data found that African Americans
and Latinos are more likely to receive high-cost loans for home purchase
and refinance, and that the disparity actually rises with income level. For
example, the ratio between African Americans and whites receiving high cost
home purchase loans is 2.0 for low-income individuals, 2.3 for moderate income,
2.6 for middle income, and an astounding 3.3 for upper income (54.4%
vs. 16.4%). The ACORN study even shows that upper income African
Americans and Latinos receive high cost loans at higher rates than lower income
whites.
http://www.bu.edu/law/central/jd/or...18no1/documents/18-1AleoandSvirskyArticle.pdf