Comments on: How the subprime crisis hit blacks hardest http://blogs.reuters.com/felix-salmon/2010/10/04/how-the-subprime-crisis-hit-blacks-hardest/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Sam_Dobermann http://blogs.reuters.com/felix-salmon/2010/10/04/how-the-subprime-crisis-hit-blacks-hardest/comment-page-1/#comment-22555 Fri, 31 Dec 2010 15:08:21 +0000 http://blogs.reuters.com/felix-salmon/?p=5631#comment-22555 George Bush set and announced many times his determination to get 5.5 million minorities to become home owners. He told people this would be good for America.

On 9/2/04: “As part of the President’s plan to build an ownership society, he has focused on encouraging homeownership, particularly among minorities and low-income families. In 2003, the number of homeowners increased by 1.7 million as the number of renters declined in the United States by over one million families.”

Some details: “American Dream Downpayment Initiative. To help low-income families overcome the hurdle of a downpayment, the President proposed the American Dream Downpayment Initiative in June 2002 and signed the American Dream Downpayment Act into law on December 16, 2003.” …

“America’s Homeownership Challenge. In June 2002, President Bush issued America’s Homeownership Challenge to the real estate and mortgage finance industries – to encourage them to join the effort to close the gap that exists between the homeownership rates of minorities and non-minorities. Due to the President’s leadership, more than 2 dozen companies have made commitments to increase minority homeownership, including pledges to finance more than $1.1 trillion in mortgage purchases for minority homebuyers this decade.”

That was great leadership President Bush. And the salesmanship? Here’s the October 15, 2002 pitch:

“Owning something is freedom, as far as I’m concerned. It’s part of a free society. And ownership of a home helps bring stability to neighborhoods. You own your home in a neighborhood, you have more interest in how your neighborhood feels, looks, whether it’s safe or not. It brings pride to people, it’s a part of an asset-based to society. It helps people build up their own individual portfolio, provides an opportunity, if need be, for a mom or a dad to leave something to their child. It’s a part of — it’s of being a — it’s a part of — an important part of America.”

Bush used his friends, like Rev. Kirbyjon in his Faith Based programs to push this:

“People — low-income people are going to be able to more afford a home in Texas because of Kirbyjon’s vision and work. He’s answered the call of faith to help people help themselves and to help them realize dreams. The other thing Kirbyjon told me, which I really appreciate, is you don’t have to have a lousy home for first-time home buyers. If you put your mind to it, the first-time home buyer, the low-income home buyer can have just as nice a house as anybody else.”

He lays out how He leaned on Fannie and Freddie to make more money available to meet his goal. Then — this next blows my mind:

And, of course, one of the larger obstacles to minority homeownership is financing, is the ability to have their dream financed. Right now, we have a program that all of you are familiar with, maybe our fellow Americans are, and that’s what they call a Section 8 housing program, that provides billions of dollars in vouchers to help low-income Americans with their rent. It encourages leasing. We think it’s important that we use those vouchers, that federal money to help low-income Americans go from being somebody who leases to somebody who owns; that we use the Section 8 program to not only help with down payment, but to help with continuing monthly mortgage payments after they’re into their new home. It is a — it is a way to help us meet this dream of 5.5 million additional families owning their home.

I’m also going to encourage the lending industry to develop a mortgage market so that this script, these vouchers, can regularly be used as a source of payment to provide more capital to lenders, who can then help more families move from rental housing into houses of their own. These are some of the barriers that home owners face, potential home owners face, and this is what we intend to do about it.

This is insane. Section 8 help is for people who can’t even pay low market rent and Bush is shoving them into being home buyers.

These lengthy excerpts are from Bush White House press releases from Oct 15 2002 and 2003 and September 2004. They are in White House Archives. I downloaded them prior to January 2009. I quoted at length because otherwise this would be unbelievable. But there was more, tax credits to builders, money shoveled out for education on how to buy without any standards or oversight, pushing Fannie and Freddie to do more, deregulation, of course, keeping interest rates and tax rates too low. His theme song was “I’m Forever Blowing Bubbles …” He almost got out of office before the bubble burst.

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By: ARJTurgot2 http://blogs.reuters.com/felix-salmon/2010/10/04/how-the-subprime-crisis-hit-blacks-hardest/comment-page-1/#comment-21274 Thu, 25 Nov 2010 03:55:33 +0000 http://blogs.reuters.com/felix-salmon/?p=5631#comment-21274 ya all have noticed this is not a uniquely American problem, right? Real estate was overvalued through a sizable part of the industrial world. Stupid mortgages were written for that overvalued real estate lots of places, and then the loans ‘securitized’.

Underlying cause was excess liquidity and lax credit standards, coupled with non-existent enforcement. All the rest, Freddie, Fannie, CRA, Clinton’s bizarre ego, Bush’s smug certitude, ‘just’ localized contributing factors.

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By: ijioh http://blogs.reuters.com/felix-salmon/2010/10/04/how-the-subprime-crisis-hit-blacks-hardest/comment-page-1/#comment-19133 Fri, 08 Oct 2010 01:10:45 +0000 http://blogs.reuters.com/felix-salmon/?p=5631#comment-19133 Some of you, are ignoring all logic and even sensible application of math in your contention that the CRA is to blame for the mortgage crisis. Case in point: Someone above (Wolverine) wrote this: “the fact that the requirements on Banks to make CRA compliant loans increased in 1997 from 30% of all bank loans to 60% of all bank loans.”
Does anyone here really believe that any U.S. bank was EVER required to make 60% of its loans in minority neighborhoods??? Really??? Black people are 13% of the population–and not all of them live in “minority neighborhoods”. So, you people are really arguing that 60% of all loans from regulated banks flowed into distressed urban neighborhoods. That makes no sense at all.

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By: ahoygal23 http://blogs.reuters.com/felix-salmon/2010/10/04/how-the-subprime-crisis-hit-blacks-hardest/comment-page-1/#comment-19098 Wed, 06 Oct 2010 06:15:10 +0000 http://blogs.reuters.com/felix-salmon/?p=5631#comment-19098 As a loan officer that started after the credit crunch I have spoken with borrowers of all races concerning their loans. I have worked with loan officers that have admitted that they targeted anyone who really wanted to purchase a home or refinance and pay off debts. I do believe greed from all played a significant roll in our mortgage crisis. Entitlement did as well. I do feel that some were not familiar with mortgage loans and became fair game for shady loan officers. I am a minority and will say that
Many that I have spoken to are of all kinds of racial backgrounds, education levels, and entitlements. I have spoken to a many of Caucasian individuals that foreclosed on many properties especially due to the fact that they took on more than they could chew with too many mortgages.Minorities too. We all as a country are responsible. There is some truth to the predatory lending. I unfortunately have come across many minorities with higher interest rates than they should have. Some with great credit in bad interest only loans. Greed and Entitlement is the end result and now we are having to all learn from our mistakes.

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By: ahoygal23 http://blogs.reuters.com/felix-salmon/2010/10/04/how-the-subprime-crisis-hit-blacks-hardest/comment-page-1/#comment-19097 Wed, 06 Oct 2010 06:15:07 +0000 http://blogs.reuters.com/felix-salmon/?p=5631#comment-19097 As a loan officer that started after the credit crunch I have spoken with borrowers of all races concerning their loans. I have worked with loan officers that have admitted that they targeted anyone who really wanted to purchase a home or refinance and pay off debts. I do believe greed from all played a significant roll in our mortgage crisis. Entitlement did as well. I do feel that some were not familiar with mortgage loans and became fair game for shady loan officers. I am a minority and will say that
Many that I have spoken to are of all kinds of racial backgrounds, education levels, and entitlements. I have spoken to a many of Caucasian individuals that foreclosed on many properties especially due to the fact that they took on more than they could chew with too many mortgages.Minorities too. We all as a country are responsible. There is some truth to the predatory lending. I unfortunately have come across many minorities with higher interest rates than they should have. Some with great credit in bad interest only loans. Greed and Entitlement is the end result and now we are having to all learn from our mistakes.

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By: Whiteathame http://blogs.reuters.com/felix-salmon/2010/10/04/how-the-subprime-crisis-hit-blacks-hardest/comment-page-1/#comment-19089 Tue, 05 Oct 2010 21:35:32 +0000 http://blogs.reuters.com/felix-salmon/?p=5631#comment-19089 Author Salmon was paid by the word and still missed the point that both gullible fools and people with poor credit ratings pay more to borrow money than people with good credit ratings and smarts. Duh?

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By: cdspider http://blogs.reuters.com/felix-salmon/2010/10/04/how-the-subprime-crisis-hit-blacks-hardest/comment-page-1/#comment-19084 Tue, 05 Oct 2010 20:26:33 +0000 http://blogs.reuters.com/felix-salmon/?p=5631#comment-19084 There is an appalling lack of self-discipline in America today. Businesses, individuals – all are culpable and it will be our downfall. Just because you CAN do something doesn’t mean you SHOULD do something.

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By: KILADI http://blogs.reuters.com/felix-salmon/2010/10/04/how-the-subprime-crisis-hit-blacks-hardest/comment-page-1/#comment-19077 Tue, 05 Oct 2010 15:01:20 +0000 http://blogs.reuters.com/felix-salmon/?p=5631#comment-19077 As a former Mortgage Banker, I can tell you that fault should be placed on all parties. Banks got greedy, and people got greedy. Regulation needs to be placed to prevent another collapse like this from ever happening. But to say that one group was targeted over others is totally untrue. As an African American myself, I lend to anyone who qualified under the banks guidelines. I did not check to see what color or where they were from. People love to place blame on anything and everything.

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By: Paine21 http://blogs.reuters.com/felix-salmon/2010/10/04/how-the-subprime-crisis-hit-blacks-hardest/comment-page-1/#comment-19076 Tue, 05 Oct 2010 15:00:36 +0000 http://blogs.reuters.com/felix-salmon/?p=5631#comment-19076 http://www.federalreserve.gov/dcca/cra/ — for those of you who mistakenly belief the Community Reinvestment Act is the cause of the foreclosure crisis.

“The Community Reinvestment Act is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe and sound operations.”

Please see this paragraph:

“Neither the CRA nor its implementing regulation gives specific criteria for rating the performance of depository institutions. Rather, the law indicates that the evaluation process should accommodate an institution’s individual circumstances. Nor does the law require institutions to make high-risk loans that jeopardize their safety. To the contrary, the law makes it clear that an institution’s CRA activities should be undertaken in a safe and sound manner.”

Again there were multiple causes for this crisis, but saying the article is a lie, or the report is one is what’s specious m5s. And your knee-jerk assumption that the article blames whites for selling the mortgages is not based on this article or the report. It doesn’t blame whites — it simply says that the research findings are that minorities in specific urban areas were targeted. And again, not all of them were unqualified.

As for blaming faceless businesses dzoo35 — ever hear of Countrywide Financial? You can Google a trail of articles on this company alone.

Willful ignorance isn’t going to change the facts. I’m as much a capitalist as anyone on this page, but these companies couldn’t and wouldn’t regulate themselves. They got greedy and the country is paying the price. Would you call that greedy? Selfish? Unpatriotic?

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By: ObjectivObsrvr http://blogs.reuters.com/felix-salmon/2010/10/04/how-the-subprime-crisis-hit-blacks-hardest/comment-page-1/#comment-19061 Tue, 05 Oct 2010 04:36:25 +0000 http://blogs.reuters.com/felix-salmon/?p=5631#comment-19061 What proof do you present for your ridiculous statement m5s? None! Why? Because there is none. You simply regurgitate the same “twaddle” you hear on talk radio.

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