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I'm not sure I understand what the OP is complaining about...
'lending to minorities/poor' isn't what caused the sub-prime mortgage mess, IMO.
If only the banks weren't TBTF and didn't look for a handout when their gambles failed...
A Renewed Crackdown on Redlining
In the wake of the subprime implosion, the Obama Administration has stepped up its scrutiny of disadvantaged neighborhoods' credit access
By Clea Benson
Community activists in St. Louis became concerned a couple of years ago that local banks weren't offering credit to the city's poor and African American residents. So they formed a group called the St. Louis Equal Housing and Community Reinvestment Alliance and began writing complaint letters to federal regulators.
Apparently, someone in Washington took notice. The Federal Reserve has cited one of the group's targets, Midwest BankCentre, a small bank that has been operating in St. Louis's predominantly white, middle-class suburbs for over a century, for failing to issue home mortgages or open branches in disadvantaged areas. Although executives at the bank say they don't discriminate, Midwest BankCentre's latest annual report says it is in the process of negotiating a settlement with the U.S. Justice Dept. over its lending practices.
Lawyers and bank consultants say regulators and the Obama Administration are scrutinizing financial ins utions for a practice that last drew attention before the rise of subprime lending: redlining. The term dates from the 1930s, when the Federal Housing Administration drew up maps using red ink to delineate inner-city neighborhoods considered too risky for lending. Congress later passed laws banning lending discrimination on the basis of race and other characteristics. "The agencies have refocused on redlining because, in the wake of the subprime explosion and sudden implosion, they are looking at these disadvantaged neighborhoods and not seeing any credit access," says Jo Ann Barefoot, co-chair at Treliant Risk Advisors in Washington, D.C., which consults with banks on regulatory issues.
The 1977 Community Reinvestment Act (CRA) requires banks to make loans in all the areas they serve, not just the wealthy ones. A Bloomberg analysis found the percentage of banks earning negative ratings from regulators on CRA exams has risen from 1.45 percent in 2007 to more than 6 percent in the first quarter of this year.
At the Justice Dept., a new 20-person unit dedicated to fair lending issues received a record number of discrimination referrals from regulators in 2010 and has dozens of open cases, according to a recent agency report. Potential penalties can reach into the millions of dollars. "We are using every tool in our arsenal to combat lending discrimination," Thomas E. Perez, the assistant attorney general for the Civil Rights Div., told a conference of community development advocates in Washington in April.
To some banks the crackdown has come as a surprise, say consultants and lawyers representing financial ins utions in discussions with regulators. Like Midwest BankCentre, some lenders are being cited for failing to operate in minority and low-income census tracts near their branches, even when they have never done business there before. "If you put your branches only in upper-income areas, the regulators are not accepting that anymore," says Warren W. Traiger, a lawyer at BuckleySandler in New York, which advises banks on fair lending issues.
Mortgage refinancing activity doubled in white neighborhoods but dropped sharply in minority neighborhoods in a sample of major U.S. cities in 2008 and 2009, according to Paying More for the American Dream, an April study by a group of seven community development nonprofits. "The pendulum has swung back too far the other way," says Kevin Stein, associate director of the California Reinvestment Coalition in San Francisco, one of the report's authors.
Bank lobbyists say the stepped-up government scrutiny could backfire if financial ins utions decide to shrink their operations rather than yield to pressure to do business in areas that don't make sense for them. "It would do a disservice to communities for a bank to suddenly pull back," says Robert Rowe, vice-president and senior counsel at the American Bankers Assn.
Meanwhile, in Missouri, things are starting to change. Midwest BankCentre Chairman Ronald T. Barnes recently announced the bank would open a branch in Pagedale, a town near St. Louis that is predominantly African American.
The bottom line: Lenders have been caught off guard by stepped-up enforcement of laws to prevent discrimination against minorities and the poor.
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I'm not sure I understand what the OP is complaining about...
'lending to minorities/poor' isn't what caused the sub-prime mortgage mess, IMO.
If only the banks weren't TBTF and didn't look for a handout when their gambles failed...
you don't know crookskanks. she's a bloated big haired phony christian that clutches her purse at the sign of any color.
The sub-prime mess was caused by banks and mortgage companies being forced to loan money to people they knew were poor credit risks and, therefore, more likely to default on the loans. The lending companies then packaged the risky loans and sold them. People defaulted and the whole house of cards came tumbling down.
Bottom line: people who are a credit risk shouldn't be given a loan - and it doesn't matter what color you are.
forced? what a dumbass.
... and then credit rating agencies rated them AAA and i-bankers sold credit default swaps on them to insure against losses thus creating systemic risk across the entire financial industry, and then it all collapsed.
Fact is there would have just been a "sub-prime mortgage crisis" and not an "every major bank on Wall Street threatening to collapse crisis" if it weren't for shady bankers.
If they didn't securitize sub-prime mortgages, they would have found something else. I hardly blame the borrowers for that.
why didn't you just start a thread called "minorities suck"?
I'll probably hurt you case by agreeing with you.
Sorry.
forced lol
Actually, it was nothing like that. Banks were more than willing to lend in order to create more of those junk mortgages which they sold as AAA rated instruments. The entire thing a huge scam which us taxpayers had to bail them out of.
Dumb people like you are part of the reason why banks keep on raping everybody.
People who are a credit risk should be offered loans tailored to their credit history/rating. Much like everyone else.
We went through this already. You were wrong then, and nothing changed.
You were far more civil in your response than I would have been.
Banks were dying to get people, any people, with any credit history, of any color at all, to accept mortgage loans. They did this so tht they could get the fees for processing the loans. That 's how they made the money. They had ZERO risk from the bad credit histories of these people because they didn't hold the mortgages...they sold them.
But that would have never happened if their weren't en ies out there to buy these bad loans.
The assertion that the poor, dear banks were bullied into providing loans for which they had no risk is a complete travesty. It is promulgated by people whose political agendas have long-since overtaken their ability to use clear thinking.
Of course there were en ies that bought the loans...en ies bought them, packaged them, made derivative markets out of them, and sold them to investors.
What does any of that have to do with the OP's erroneous assertion that it was the banks being forced to lend to unqualified minorities that prompted the housing fiasco?
A. Banks were not forced to lend to subprime buyers. They wanted to do it.
B. The market for mortgage loans was created by wall street as a financial product to be bought and sold.
I could be wrong here, but I don't think the legal framework was in place to package up these high risk loans until political correctness found it as a solution.
"sub-prime mess was caused by banks and mortgage companies being forced to loan money to people they knew were poor credit risks"
YOU LIE
govt can't for the lenders to modify their ty loans!
govt can't force the lenders to lend!
The lenders lent to unqualified borrowers, pocketed their fees, and flipped the toxic mortgages into the financial rabbit hole. The lenders didn't care if the borrowers were unqualified, because the lenders didn't have to service the toxic mortgages.
"political correctness found it as a solution."
WC spewing his fantastic based on his ideological fantasies.
CRA, blacks, old people, political correcteness!
That's all a pile of stinking lies as smokescreen to hide the real culprits, the lenders. The majority of toxic loans were written by UNREGULATED private-money lenders and UNREGULATED subsidiaries of regulated banks, meaning govt had NO REGULATORY/CRA control over them.
Wow you couldn't be more wrong if you tried to be.
There's no case. Anyone who believes that is pretty god damn oblivious of the facts.
Not only that, but sub prime loans were so great for the banks they put people who had no business being in loans that harsh into them fraudulently. This thread shows how ing dumb people are.
What the flying ? WTF does political correctness have to do with people smart enough to over a lot of others coming up with derivativeness?
You might as well start all your posts with I am wrong.
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