Snapshot of the Subprime Market November 28, 2007
sorrpoint
>> If that happened, and i have no reason to doubt you
>> ... what does that have to do with CRA/F&F loans to
>> minorities, as opposed to simply really bad borrowing
>> and lending practices of itself???
>
Jim replied thusly:
> We are seeing substantial evidence of very different
> default rates, which suggests very different lending
> standards for people [who] are members of protected
> minorities.
>
AND also Jim claims that ::
"Bush's American Dream Downpayment act was a massive and
dramatic strengthening of affirmative action in lending,
touching off an immediate and massive rise in the
proportion of loans made to blacks and hispanics. "
AND that
"No one is blaming blacks and hispanics. We are blaming
regulators and affirmative action. "
IOW Jim and others are suggesting that the PRIMARY cause of the Subprime
collapse [ and therefore the whole Financial Crisis that flows from Subprime
in the USA alone ] is because Mortgage Lenders were FORCED BY THE GOVERNMENT
to LOWER their standards of issuing Home Loans to Minorities and Low Income
people
[ Such anti-discrimination Regulations and Laws were started back in the
70's under Carter, but especially by Clinton before he left, and even later
by Bush himself. ]
BUT here are some FACTS to consider here::
A Snapshot of the Subprime Market November 28, 2007
OR
http://www.responsiblelending.org/pdfs/snapshot-of-the-subprime-market.pdf
Subprime mortgages are high-cost home loans intended for people with weak or
blemished credit histories. Higher interest rates make sense for higher-risk
loans to a point, but the subprime market has been rife with problems that
are rare in the mainstream prime market: excessive fees, high penalties for
refinancing, refinances that provide no real benefit to homeowners, and
steering families into more expensive loans when they qualify for a better
rate.
In recent years, subprime lenders and brokers flooded the growing subprime
market with dangerous mortgages that come with “exploding” adjustable
interest rates. The result is a massive epidemic of foreclosures that is
harming families, entire residential communities, not to mention the
availability of credit at home and abroad
Proportion of subprime mortgages made from 2004 to 2006 that come with
“exploding” adjustable interest rates: 89-93%
Dollar amount of subprime loans outstanding 2006 : $1.3 trillion
Dollar amount of subprime loans outstanding in 2003: $332 billion 4
Proportion approved without fully documented income:43-50%
Proportion of completed foreclosures attributable to adjustable rate loans
out of all loans made in 2006 and bundled in subprime mortgage backed
securities: 93%
Percentage increase of interest rate on an “exploding” ARM resetting to 12%
from 7%: 70%
Typical increase in monthly payment (3 rd yr): 30% to 50%
Number of subprime mortgages set for an interest-rate reset in 2007 and
2008: 1.8 million
Valued at: $450 billion
Subprime vs. Prime Loans
Subprime share of all mortgage originations in 2006: 28%
Subprime share of all mortgage origination in 2003: 8%
-------------------------------------------------------------------------
SEAN:
OK and here is the REAL RUB in all of this ::
What happened between 2003 and 2006 that caused such a MASSIVE increase in
Subprime Loans??
Bush was the President - and there was a Republican Controlled Congress
SHOW ME THE LAW they specifically made before 2006 and during or after 2003
that would account for the $1 Trillion explosion in Subprime loans TO
Minorities or the Low Income person in particular, that either MANDATED or
FORCED Home Mortgage Lenders to provide Subprime Loans to them!!!
SHOW ME THE LAW that mandated or enforced Lenders to NOT VERIFY that up 50%
of Subprime Borrowers could afford to repay their ARM Subprime Loans, both
in the beginning and when Rates were RE-set 2-3 years later and more!!!
SHOW ME THE LAW that mandated or forced home mortgage lenders to
SPECIFICALLY make SUBPRIME LOANS, and to specifically make Adjustable Rate
Mortgage ARM Loans, as opposed to any other type of loan, to Minorities and
the Low Income person?
Please be specific - and quote these Laws in the detail that addresses the
above points, if possible.
A URL link to a Congressional Website would be nice.
I do not believe ANY such Laws exist.
I think that something else entirely different was going on that led to a
massive increase in UN-Repayable Loans to all sorts of people, including
Minority groups, that had NOTHING to do with any Anti-Discrimination or
Affirmative Action Laws passed by ANY US Govt. or Congress in the history of
the nation.
ANYONE think they can prove otherwise????
Then by all means please Show me the LAWS that do.
Thanks Sean
--
Another SORR Point Memo
from the Sean O'Reilly Report : Fair and Balanced and Free
sorrpoint
And again there's the issue of BOTH sides of politics passing these Laws,
and the voters continuing to vote for these people nevertheless. It's a big
bag of spaghetti and wriggly worms, with little accountability, or logic
imho.
------------------------------------------------------------------------
online comments:
I think LoT should really do his homework here. There have been many
studies where both black and white testers or secret shoppers were sent to
banks with equal credit ratings and financial incomes, and had them request
conventional or FHA mortgages for the very same housing. Guess what? Blacks
were subjected to different and/or unequal treatment in terms of loan
prequalification. Blacks were often told their income and credit was
inadequate to qualify for the loans they sought, while whites with identical
incomes and credit were told they would qualify for the same loans.
I see it every day my friend. I work with these people.
---
Recent research, including federal data, proves the rampant discrimination
in mortgage lending:
A July 2007 report by Freddie Mac (Federal Home Loan Mortgage Corporation)
showed that minority borrowers pay higher annual percentage rates on
mortgage loans than non-minorities with equal income and credit risk. For
instance, in 2005, African American borrowers paid an average of 128 basis
points more for loans than their white counterparts. In the subprime market,
the difference was even greater -- 275 basis points more.
A 2006 Center for Responsible Lending study that found when income and
credit risk were equal, African-Americans were 31 percent to 34 percent more
likely to receive higher-rate, more expensive subprime loans than
Caucasians.
A 2008 study by United for a Fair Economy finds cites federal data showing
people of color are more than three times more likely to have subprime
loans: high-cost loans account for 55% of loans to African Americans, but
only 17% of loans to Caucasians.
The study also estimated losses of between $164 billion and $213 billion for
subprime loans taken by people of color during the past eight years. This is
thought to be "the greatest loss of wealth for people of color in modern US
history."
The National Community Reinvestment Coalition found in 2006 that lending
institutions in six major metropolitan areas were engaged in "pervasive
discriminatory and predatory practices" involving high-cost subprime loans
to African-Americans. The metro areas were: Baltimore, Washington, Chicago,
Los Angeles, St. Louis and Atlanta.
In addition to finding discrimination nationwide, the study found that
people of all income levels -- not just low or middle - were victimized. For
example, the study found that in Boston, 73 percent of high income ($92,000
to $152,000 annual salary) African Americans received subprime loans in
2005.
The Federal Reserve Board has concluded that African Americans were more
likely to pay higher prices for mortgages than their Caucasian counterparts.
The United States Inspector General cited the Federal Reserve Board report
as showing "significant" differences, making it "clear" that
African-Americans were "much more likely to get higher-priced loans" than
Caucasians.
----------------------------------------------------------
Sean:
BTW HIGHER INTEREST and repayment amounts LAID UPON not just minorities but
all OF SUB-PRIME LOANS [ all things being equal ] MEANS A GREATER LIKELIHOOD
OF DEFAULTING LONG TERM,
.......... ESPECIALLY WITH ARM'S jumping circa 5% or so 2-3 years after
taking out the loan, which was the latest "marketing gimmick" of non-cra and
non- F&F type loans to whoever walked through the door.
These ARM's caused a jump in repayments of between 35 - 50%. Repayments
jumped from well under $1000 per month, up to circa $1700 per month on a
small below median loan.
Minorities and the low income person, as well as to whites be they
low-income or median and above incomes were ALL taken advantage of in this
feeding frenzy of rolling out "cheap and easy credit" in the USA.
Just because the minorities may have defaulted first % wise, is irrelevant
to what the underlying and systemic causes happen to be.
Namely it sure isn't caused by any Affirmative action Laws that were
mandated or forced upon Lenders and Financiers. If that is ALL it was, there
wouldn't now be a major systemic crisis occurring in the USA Financial
System that is affecting the entire economy there, and the whole world.
Surely this at least would cause some people to pause and re-consider their
current beliefs about who's to blame, and why they are to blame.
cheers sean
-----------------------------------------------
ORIGINAL POST
"sorrpoint" <Rela...@theBeach.DownUnder.org> wrote in message
news:4938b3f2$0$3631$afc3...@news.optusnet.com.au...
sorrpoint
> ADDENDUM INFO
>
There was a deterioration in lending standards generally dated to 2004 or
2005. Families that lacked the income and down payment to buy a house under
the terms of a conforming mortgage were encouraged to take out a mortgage
that had a very high loan to value ratio, perhaps as high as 100 percent
(often using second or even third mortgages), meaning that they started with
no initial equity - and thus no true financial stake - in the house Such
borrowing typically requires a rather high interest rate and high monthly
payment, one that likely violates the usual rules on the proportion of
household income needed to service the debt. Originators got around this
problem by offering Adjustable Rate Mortgages (ARMs), which had low initial
payments that would last for two or three years, before resetting to a
higher monthly amount. These so-called "teaser" interest rates were often
not that low, but
low enough to allow the mortgage to go through.8 Borrowers were told that in
two or three years the price of their house would have increased enough to
allow them to re-finance the loan. Home prices were rising at 10 to 20
percent a year in many locations, so that as long as this continued, a loan
to value ratio of 100 percent would decline to 80 percent or so after a
short time, and the household could re-finance with a conformable or prime
jumbo mortgage on more favorable terms.
There is a lively industry in the United States that offers guides for
people who want to make money by buying residential real estate and then
re-selling it at a profit. The Miami condominium market was a favorite place
for real estate speculation as investors bought condos at pre-construction
prices and then sold them after a short time at a profit. Speculative
demand-buying for the purpose of making a short-term profit-added to overall
housing demand.9
By their, nature fraudulent practices are hard to assess in terms of the
volume of outright fraud, but based on press reports and interviews, it
seems clear that shading the truth and outright fraud became important in
the real estate boom (and in the subsequent bust). According to the
Financial Crimes Enforcement Network, the number of reported cases of
mortgage fraud increased every year since the late 1990s, reaching nearly
53,000 in 2007, compared with roughly 3,500 in 2000.10 Some borrowers lied
about their income, whether or not they were going to live in the house they
were buying, and the extent of their debts. Credit scores can be
manipulated, for example, by people who become signatories on the credit
accounts of friends or relatives with good credit ratings. Without having to
make regular payments on a loan themselves, they
can acquire the high credit rating of the other person. Another fraudulent
practice occurred with speculators. Mortgage lenders want to know if a
household will actually occupy a house or unit being purchased; or if it
will be rented out or re-sold. This knowledge affects the probabilities of
default or of early repayment, both of which can impose costs on the lender.
We do not know how many delinquent mortgages are on properties that are not
owner-occupied, but we have heard figures in the 40 to 50 percent range.
Misrepresentation by borrowers and deceptive practices by lenders were often
linked together. A mortgage broker being paid on commission might lead the
borrower through an application process, suggesting places the borrower
might change the answer or where to leave out damaging information.
Sometimes the line will be fuzzy between a situation where broker helps a
family navigate the application process so they can buy a house they really
can afford, and a situation where the broker and the applicant are
deliberately lying.
Looking at the data, the deterioration in lending standards over the course
of the boom is remarkable. The share of subprime loans originated as ARMs
jumped from 51 to 81 percent from 1999 to 2006; for Alt-A loans, the share
jumped from 6 to 70 percent during the same time period. A similar
deterioration happened in combined loan to value ratios (the CLTV combines
all liens against a property): the average CLTV ratio for originated
subprime loans jumped from 79 to 86 percent. Furthermore, the share of
full-doc subprime originations fell from 69 to 58 percent; for Alt-A loans
it dropped from 38 to 16 percent.11
Figure 3 provides further illustration of the shift into riskier lending as
the boom progressed. It shows the proportion of mortgage originations for
home purchase that were made based on interest only or negative amortization
loan provisions ("refis" are excluded from this data). Someone borrowing
with an interest-only loan pays a slightly lower monthly payment because
there is no repayment of principal. Since the principal repayment in the
first few years of a mortgage are usually very small, this is not a big
issue in the short run, although the impact mounts up over the years. A
negative amortization loan goes even further, and borrowers do not even pay
the full amount of the interest accruing each month, so the outstanding
balance rises over time. Such a mortgage might make sense for families whose
incomes are rising over time and where home prices are rising, but it adds a
significant amount of risk for both borrower and lender.
In summary, the boom in mortgage borrowing was sustained by low interest
rates and easier lending practices. As households cashed in the wealth in
their property for consumption, less credit-worthy families were able to buy
houses, and speculators purchased property in hopes of making money by
reselling them. The increasingly lax lending standards are characteristic of
classic behavior during bubbles. Fraud, lack of due diligence, and deceptive
practices occurred on both sides of the mortgage transactions, but as long
as house prices continued to rise at a good pace, the whole structure could
continue, and even the fraud and deception were buried as people were able
to refinance and were unlikely to default on their mortgages and lose the
equity (if they had any) that they had built up.
With the benefit of hindsight we can look back and see that some of the
innovative mortgage products have contributed to the default mess we have
now. However, we would like to note that this analysis is not meant to be
construed as a call to restrict financial innovations. There were
substantial benefits to those who used the products properly.
from pages 14 - 17
GREAT PAPER, full of accurate data, and rational analysis [ mostly ]
tg
wrote:
>
> OR
>
> http://www.responsiblelending.org/pdfs/snapshot-of-the-subprime-marke...
As has been pointed out fairly often now, the likeliest culprit for
the bad loans themselves was the ability of lenders to securitize the
loans, which gave them incentive to make as many loans as possible,
and *as little* incentive as possible to care if they were ever
repayed.
Once this funny-money instrument was created, the casino effect took
over as everyone was playing with chips, and we end up with debt swaps
and the generalized financial insanity.
Look to deregulation for these effects.
-tg
*Anarcissie*
I think the production of easy credit money is a more
fundamental driving force in the subprime market and
a lot of other areas. The subprime mortgages were
only the weakest link in the chain.
patmp...@gmail.com
True. And credit card and auto debt are securitized in the same way.
I don't know whether they were getting AAA ratings though.
There's a house of cards if there ever was one.
patmp...@gmail.com
That's true, but it was the bad mortages getting AAA ratings and
general fraud that made it so bad.
ZerkonXXXX
> IOW Jim and others are suggesting that the PRIMARY cause of the Subprime
> collapse [ and therefore the whole Financial Crisis that flows from
> Subprime in the USA alone ] is because Mortgage Lenders were FORCED BY
> THE GOVERNMENT to LOWER their standards of issuing Home Loans to
> Minorities and Low Income people
this is just bullshit. 'Forced' indeed. These same guys were then
'forced' into making massive profits off of this exact same thing?
This is why predatory lenders are 'forced' to set up 'payday loan'
storefronts in every poor neighborhood across the country. Why banks and
'lenders' give out credit cards like candy?
Top Tip: You do NOT loan money to people who can pay it back you loan
money to people who can not. This is the "ownership" society. When
someone can not pay the loan back you 'own them'. No credit card company
WANTS you to pay off the balance each month. No bank WANTS you to pay off
a mortgage or a car loan early.
These home loans were NOT confined to poor or minorities. Yippy yuppy
home buyers were given loans against >> projected << home values, since
banks could pass/sell their loans off they wrote as many as they could.
Ask this simple question: If the home loans packaged into bonds were
rated correctly or legally, would this have happened the way it has?
The problem is not and was not the loans, it was and is what happened to
those loans after they were made.
sorrpoint
"ZerkonXXXX" <Z...@erkonx.net> wrote in message
news:pan.2008.12...@erkonx.net...
> On Fri, 05 Dec 2008 15:54:14 +1100, sorrpoint wrote:
>
>> IOW Jim and others are suggesting that the PRIMARY cause of the Subprime
>> collapse [ and therefore the whole Financial Crisis that flows from
>> Subprime in the USA alone ] is because Mortgage Lenders were FORCED BY
>> THE GOVERNMENT to LOWER their standards of issuing Home Loans to
>> Minorities and Low Income people
>
> this is just bullshit. 'Forced' indeed. These same guys were then
> 'forced' into making massive profits off of this exact same thing?
> This is why predatory lenders are 'forced' to set up 'payday loan'
> storefronts in every poor neighborhood across the country. Why banks and
> 'lenders' give out credit cards like candy?
>
> Top Tip: You do NOT loan money to people who can pay it back you loan
> money to people who can not. This is the "ownership" society. When
> someone can not pay the loan back you 'own them'. No credit card company
> WANTS you to pay off the balance each month. No bank WANTS you to pay off
> a mortgage or a car loan early.
>
Exactly, because that is where the majority of *clear profits* are made.
> These home loans were NOT confined to poor or minorities. Yippy yuppy
> home buyers were given loans against >> projected << home values, since
> banks could pass/sell their loans off they wrote as many as they could.
>
> Ask this simple question: If the home loans packaged into bonds were
> rated correctly or legally, would this have happened the way it has?
>
> The problem is not and was not the loans, it was and is what happened to
> those loans after they were made.
>
>
Good points, but I think you'll find it was BOTH the actual nature of the
Loans themselves, as well as what happened afterwards.
And yet, it was very much weighted upon what *could* happen afterwards, that
created most of the impetus for *how* the majority of these Subprime Loans
post 2001, but especially 2003 onwards were made.
thx
sorrpoint
>
> Then by all means please Show me the LAWS that do.
>
> Thanks Sean
>
> --
> Another SORR Point Memo
> from the Sean O'Reilly Report : Fair and Balanced and Free
As has been pointed out fairly often now, the likeliest culprit for
the bad loans themselves was the ability of lenders to securitize the
loans, which gave them incentive to make as many loans as possible,
and *as little* incentive as possible to care if they were ever
repayed.
Once this funny-money instrument was created, the casino effect took
over as everyone was playing with chips, and we end up with debt swaps
and the generalized financial insanity.
Look to deregulation for these effects.
-tg
----------------------------------------------------------------------------------------
I think that is a fairly accurate short summary of the psychology of it. I
can agree.
And yes, one would think given this senario has been "pointed out fairly
often by now" that the info would have filtered down to the all-so-rans. But
nay, not so as yet. Still much mis-information and ill-formed beliefs
abound.
IOW nothing really to do with protection of minorities at all, even IF they
too defaulted. More like "collateral" damage to me.
cheers sean
sorrpoint
<patmp...@gmail.com> wrote in message
news:c080d1ff-59e4-4cac...@s9g2000prg.googlegroups.com...
---------------------------------------------------------------
Yes, and it's a bout to topple over very very soon.
They aren't AAA btw because they are non-real-estate-secured loans, and
non-govt backed securities. But what makes up for that is the 20% Interest
rates being charged on such types of loans. imho i believe that is the case.
not 100% certain though.
James A. Donald
<Rela...@theBeach.DownUnder.org> wrote:
> There was a deterioration in lending standards
> generally dated to 2004 or 2005. Families that lacked
> the income and down payment to buy a house under the
> terms of a conforming mortgage were encouraged to take
> out a mortgage that had a very high loan to value
> ratio, perhaps as high as 100 percent (often using
> second or even third mortgages), meaning that they
> started with no initial equity - and thus no true
> financial stake - in the house
Not quite true.
Members of protected minorities were encouraged to take
out no money down loans. Whites were not.
This is visible in the striking normality of the
California real estate market in areas with very few
members of protected minorities, such as West Palo Alto.
We are not seeing large numbers of foreclosure sales in
such areas.
--
----------------------
We have the right to defend ourselves and our property, because
of the kind of animals that we are. True law derives from this
right, not from the arbitrary power of the omnipotent state.
James A. Donald
> collapse [ and therefore the whole Financial Crisis that flows from Subprime
> in the USA alone ] is because Mortgage Lenders were FORCED BY THE GOVERNMENT
> to LOWER their standards of issuing Home Loans to Minorities and Low Income
> people
>
>
> BUT here are some FACTS to consider here::
>
> A Snapshot of the Subprime Market November 28, 2007
>
>
> http://209.85.173.132/search?q=cache:NqAH9QxF_ugJ:www.responsiblelending.org/pdfs/snapshot-of-the-subprime-market.pdf+subprime+arm+resetting+interest+rates+2006&hl=en&ct=clnk&cd=9&gl=au
Which examines the defaults and the subprime market in every way,
breaking it down by this category, that category, and the other
category, with the striking omission that it fails to break it down by
race.
That striking omission is the dog that did not bark.
James A. Donald
> but it was the bad mortages getting AAA ratings and
> general fraud that made it so bad.
But the fraud was not general. The fraud was located in
very specific suburbs.
By and large, the default mortgages were fraudulent, and
when housing prices fell, all fraudulent mortgages
defaulted. You will notice that there is freeway
running through Palo Alto. West of the freeway, live
whites and unprotected minorities. East of the freeway,
live members of protected minorities. Fraudulent
mortgages were massive on one side of the freeway,
insignificant on the other side.
Fraudulent mortgages are for the most part affirmative
action mortgages - fraudulent mortgages are mostly
issued to the same people to whom fraudulent degrees are
issued.
James A. Donald
> I think LoT should really do his homework here. There
> have been many studies where both black and white
> testers or secret shoppers were sent to banks with
> equal credit ratings and financial incomes, and had
> them request conventional or FHA mortgages for the
> very same housing. Guess what? Blacks were subjected
> to different and/or unequal treatment in terms of loan
> prequalification. Blacks were often told their income
> and credit was inadequate to qualify for the loans
> they sought, while whites with identical incomes and
> credit were told they would qualify for the same
> loans.
>
> I see it every day my friend. I work with these
> people.
Yet oddly, though lawsuit after lawsuit needed such
evidence, none such was ever presented.
For a summary of what *was* presented, see
<http://www.urban.org/UploadedPDF/mortgage_lending.pdf>
They were looking for evidence of racism, and what they
came up with was mighty thin gruel.
That this was a crisis of affirmative action lending is
illustrated by the difference between today's West Palo
Alto housing market, and today's East Palo Alto housing
market. The protected minorities live east of the
freeway, the whites and unprotected minorities live west
of the freeway. One side of the freeway, most of the
mortgages are in default. On the other side of the
freeway, housing market is normal.
> Recent research, including federal data, proves the
> rampant discrimination in mortgage lending:
>
> A July 2007 report by Freddie Mac (Federal Home Loan
> Mortgage Corporation) showed that minority borrowers
> pay higher annual percentage rates on mortgage loans
> than non-minorities with equal income and credit risk.
> For instance, in 2005, African American borrowers paid
> an average of 128 basis points more for loans than
> their white counterparts. In the subprime market, the
> difference was even greater -- 275 basis points more.
Reflecting the fact that blacks got no money down loans,
and whites did not.
James A. Donald
> fundamental driving force in the subprime market and
> a lot of other areas.
Easy money, not affirmative action made the bubble.
Affirmative action however caused financial markets
to lock up.
Shrik...@gmail.com
The usual suspect for the fundamentalist, eh?
My ass. If those gamblers didn't believe those
securities were backed up by the gummint in
the first place, they might have to worry about
whether they'd be paid back. Fannie Mae
itself ain't exactly a private bank.
Anyway, fortunately, I am now in the regulation
bidness. I'll be making sure it doesn't become
a bubble by developing a system of self-replicating
regulations, such that they are fruitful and
exponentiate until they are so thick in everyone's
guts that they are even regulating all of our bodily
functions. It'll be too big to fail then, that's for
sure. Be careful what you wish for, control freaks!
James A. Donald
> As has been pointed out fairly often now, the
> likeliest culprit for the bad loans themselves was the
> ability of lenders to securitize the loans, which gave
> them incentive to make as many loans as possible, and
> *as little* incentive as possible to care if they were
> ever repayed.
And what was it that gave them incentive to make such
loans primarily to members of protected minorities?
If it was securitization to blame, why are we not seeing
a wave of similar defaults in suburbs such as west Palo
Alto that have very few members of protected minorities?
Agreed, securitization was a really bad idea - but what
makes it bad is that the regulators could foist
affirmative action loans on investors, and investors
would not realize how badly they were being burnt by
affirmative action.
That the rating agencies rated crap securities AAAAA may
well be because they are corrupt - but they are corrupt
because the regulators *needed* them to be corrupt -
because the officers of an honest rating agency would be
facing lawsuits as racists.
sorrpoint
"James A. Donald" <jam...@echeque.com> wrote in message
news:0spmj41uvdmlui5m5...@4ax.com...
> "sorrpoint"
> <Rela...@theBeach.DownUnder.org> wrote:
>
>> There was a deterioration in lending standards
>> generally dated to 2004 or 2005. Families that lacked
>> the income and down payment to buy a house under the
>> terms of a conforming mortgage were encouraged to take
>> out a mortgage that had a very high loan to value
>> ratio, perhaps as high as 100 percent (often using
>> second or even third mortgages), meaning that they
>> started with no initial equity - and thus no true
>> financial stake - in the house
>
> Not quite true.
>
> Members of protected minorities were encouraged to take
> out no money down loans. Whites were not.
>
> This is visible in the striking normality of the
> California real estate market in areas with very few
> members of protected minorities, such as West Palo Alto.
> We are not seeing large numbers of foreclosure sales in
> such areas.
>
OK, well I did a search and this is the first page i looked at.
http://query.nytimes.com/gst/fullpage.html?res=9402E5DF153BF936A25753C1A9619C8B63&sec=&spon=&pagewanted=all
The analysis showed that even when median income levels were comparable,
home buyers in minority neighborhoods were more likely to get a loan from a
subprime lender.
In Jamaica, Queens, for example, where the majority is black and the median
household income was $45,000 in 2005, 46 percent of the mortgages were
issued by lenders who specialize in subprime loans, the second highest rate
in the city. In Bay Ridge, Brooklyn, which had a median income of $50,000
and is mostly white, the rate was among the lowest in the city, with 3.6
percent of home loans coming from subprime lenders.
The analysis provides only a limited picture of subprime borrowing in New
York City. The data does not include details on borrowers' assets, down
payments or debt loads, all key factors in mortgage lending. And comparing
neighborhoods is inexact; the typical borrower in one may differ from a
typical borrower in another.
Jay Brinkmann, an economist with the Mortgage Bankers Association, said
there was not enough information in the Furman Center analysis and other
studies on the issue to draw conclusions about whether subprime lenders were
discriminating against minority home buyers. One of the crucial missing
pieces is the credit histories of individual borrowers, he said.
But the Furman Center study, a summary of which is being released today,
still raises questions about the role of race in lending practices. A
separate analysis of mortgage data by The New York Times shows that even at
higher income levels, black borrowers in New York City were far more likely
than white borrowers with similar incomes and mortgage amounts to receive a
subprime loan.
''It's almost as if subprime lenders put a circle around neighborhoods of
color and say, 'This is where were going to do our thing,''' said Robert
Stroup, a lawyer and the director of the economic justice program at the
NAACP Legal Defense and Educational Fund Inc.
The New York State Division of Human Rights is investigating whether
subprime lenders have been engaging in discriminatory practices by singling
out minority communities.
and
She said a variety of lending practices and patterns could be considered
unlawful discrimination, like a mortgage broker who works only in certain
neighborhoods or who offers white borrowers better rates than similarly
qualified black or Hispanic customers. Many mortgages are handled by brokers
who work as a liaison between borrowers and lenders and earn a fee
The N.A.A.C.P. filed a lawsuit in federal court in Los Angeles this year
against 12 mortgage lenders. The lawsuit accuses the companies of steering
black borrowers into subprime loans.
An analysis by The Times of the 2006 data that lenders disclosed under the
federal Home Mortgage Disclosure Act shows that in New York City, the rate
of subprime lending is far higher for minorities than for whites even at
higher income levels. For example, 24 percent of non-Hispanic white
borrowers earning $125,000 to $150,000 took out a subprime mortgage in 2006,
compared with 52 percent of Hispanics and 63 percent of non-Hispanic blacks
in the same income range.
For borrowers earning $150,000 to $250,000, the rate of subprime loans was
20 percent for whites, 50 percent for Hispanics and 62 percent for blacks.
That analysis looked at all mortgages reported to the federal government,
not just those issued by companies identified as subprime lenders.
--------------------------------------------------------------------------------------------
The question being ... is the higher level of subprime loans to minorities
got ANYTHING at all to do with Govt affirmative action policy/rules or not?
Or is it perhaps a concious business decision by lenders & sales people and
agents to push higher cost funds to minorities as another example of them
being taken advantage of, and further discriminated against - as opposed to
"protected" as claimed?
[ and that because of the huge rise in the MBS's products, that the main
focus of these loans was the rpofit taking in re-packaging of them, and
getting the "bad assets" off the books asap before they defaulted ]
From all that I have seen to date, it appears quite likely that the later is
actually the predominate case from 2003 thru to 2007 when the house of cards
began to fall over.
cheers sean
sorrpoint
So your personal direct anecdotal evidence counters the other persons
personal direct anecdotal evidence.
You both can't be right ... except maybe in each persons individual location
of expereince. So I'm happy to accept both your reports at face value, and
yet at the same time realise that neither represent the true picture, or the
ultimate sequence of cause and effect that has led to the property bubble
bursting, the run of defaults and the subsequent financial meltdown around
the world.
>> Recent research, including federal data, proves the
>> rampant discrimination in mortgage lending:
>>
>> A July 2007 report by Freddie Mac (Federal Home Loan
>> Mortgage Corporation) showed that minority borrowers
>> pay higher annual percentage rates on mortgage loans
>> than non-minorities with equal income and credit risk.
>> For instance, in 2005, African American borrowers paid
>> an average of 128 basis points more for loans than
>> their white counterparts. In the subprime market, the
>> difference was even greater -- 275 basis points more.
>
> Reflecting the fact that blacks got no money down loans,
> and whites did not.
>
That's a BIG leap in assumptions, vs what was actually said in the report.
sorrpoint
> patmp...@gmail.com wrote:
>> but it was the bad mortages getting AAA ratings and
>> general fraud that made it so bad.
>
> But the fraud was not general. The fraud was located in
> very specific suburbs.
>
> By and large, the default mortgages were fraudulent, and
> when housing prices fell, all fraudulent mortgages
> defaulted. You will notice that there is freeway
> running through Palo Alto. West of the freeway, live
> whites and unprotected minorities. East of the freeway,
> live members of protected minorities. Fraudulent
> mortgages were massive on one side of the freeway,
> insignificant on the other side.
>
> Fraudulent mortgages are for the most part affirmative
> action mortgages - fraudulent mortgages are mostly
> issued to the same people to whom fraudulent degrees are
> issued.
>
So it was these people that were either more gullible and naive, or were
perhaps specifically targetted in an advertising and sales gimmick to
consciously SELL FRAUDULENT MORTGAGES.
Which would actually prove a case of minority targetted predatory lending,
as opposed to being a "protected" group. IOW it may well prove to be racial
discrimination, and not affirmative action at all.
Wouldn't that be a twist? I guess it depends on how much you and others
really want to know the truth about this whole disaster confronting the USA,
and where the trail leads as far as fault & responsbility is concerned.
And that would be up to you and others just like you to choose where it ends
up.
Whatever I might have to say or post about it is moot. But I knew that from
the beginning of my research so no delusions there. :)
sorrpoint
> On Fri, 5 Dec 2008 05:13:42 -0800 (PST), "*Anarcissie*"
>> I think the production of easy credit money is a more
>> fundamental driving force in the subprime market and
>> a lot of other areas.
>
> Easy money, not affirmative action made the bubble.
Now that's a subtle change of pov.
> Affirmative action however caused financial markets
> to lock up.
>
How do separate the two issues like that?
sorrpoint
> tg <tgde...@earthlink.net> wrote:
>> As has been pointed out fairly often now, the
>> likeliest culprit for the bad loans themselves was the
>> ability of lenders to securitize the loans, which gave
>> them incentive to make as many loans as possible, and
>> *as little* incentive as possible to care if they were
>> ever repayed.
>
> And what was it that gave them incentive to make such
> loans primarily to members of protected minorities?
>
How about general inexperience and gullibility of the minorities not usually
being sold the goose that will lay their golden egg?
IOW the appication in some cases of slick manipulative, deceitful and
"predatory" lending?
> If it was securitization to blame, why are we not seeing
> a wave of similar defaults in suburbs such as west Palo
> Alto that have very few members of protected minorities?
>
They got better deals offered to them by other lenders, or their personal
banks when they wanted to buy a new home or re-finance their existing home.
> Agreed, securitization was a really bad idea - but what
> makes it bad is that the regulators could foist
> affirmative action loans on investors, and investors
> would not realize how badly they were being burnt by
> affirmative action.
>
Non-affirmative action loans also are under water. last report I saw was 20%
of existing home loans across the USA are now under-water.
> That the rating agencies rated crap securities AAAAA may
> well be because they are corrupt - but they are corrupt
> because the regulators *needed* them to be corrupt -
> because the officers of an honest rating agency would be
> facing lawsuits as racists.
>
They were just AAA rated Jim .... anything via F & F were automatically AAA
, anything just like F & F that were personal home mortgages were also AAA
..... then there was also lower scales where the less "prime" loans were
rated differently, but the returns offered on those were higher % securites
over time ...... these went bust first I believe, but all these are going
bust since July 2008, AAA or not.
The other issue that should be seriously considered and remembered is the
ease at which borrowers can just walk away from a home when the house prices
drop. How things work in the USA market are very different than say here.
One cannot simply send their keys back to the bank in the mail, and
walk-away. This fact has compounded the effect of the intial defaults.
Another is the accepted way that existing home re-financing occurs when
"values" increase, where the majority of the risk falls onto the the lender
and not the borrower should the values decline, and the rash way on which
massive home value increases led to an equally rapid rise in rash lending as
if house bubble would not burst even though it was way ahead of median
incomes which was actually falling.
IOW there is much about the systemic structure of the US home mortgage and
finance industry that has played a role in the crisis. One needs to be
careful in weighing up the effects of each part of the systems role in both
building it up, and in bringing it down.
As I saw somehwere recently it was a "perfect storm" .... many things coming
together at the same time. And yet it was predicted, and still ignored.
sorrpoint
<Shrik...@gmail.com> wrote in message
news:0a9da79e-b619-4584...@p2g2000prf.googlegroups.com...
----------------------------------------------------------------------
Sean:
Well I am pretty confident that I could say there are about 2 million
families out there who still wished they had their own home, and at least 1
million this last year who wished they still had a job, and millions who
wished their Share Portfolios were worth even half what they were in january
2008, and there's maybe 30 million at least who;d be wishing they had more
left in their Pension Funds than they do now a few years or months before
retiring ...... and I bet every single person who had shares or assets in
Lehmanns had gone to Vegas instead ... as it would have been a much safer
bet there with at a chance of a return, vs ZERO.
So by all means rag the calls for some rational balanced Regulation against
the merchants of Doom who have moved to the Caymans and Bahamas with all the
loot they made in the last few years on the backs of everyday working
people, the mums and pops, brothers and sisters, and friends of everyone
whoever posted to a newsgroup.
sorrpoint
>
> "James A. Donald" <jam...@echeque.com> wrote in message
> news:0spmj41uvdmlui5m5...@4ax.com...
>> "sorrpoint"
>> <Rela...@theBeach.DownUnder.org> wrote:
>>
>>> There was a deterioration in lending standards
>>> generally dated to 2004 or 2005. Families that lacked
>>> the income and down payment to buy a house under the
>>> terms of a conforming mortgage were encouraged to take
>>> out a mortgage that had a very high loan to value
>>> ratio, perhaps as high as 100 percent (often using
>>> second or even third mortgages), meaning that they
>>> started with no initial equity - and thus no true
>>> financial stake - in the house
>>
>> Not quite true.
>>
>> Members of protected minorities were encouraged to take
>> out no money down loans. Whites were not.
>>
>> This is visible in the striking normality of the
>> California real estate market in areas with very few
>> members of protected minorities, such as West Palo Alto.
>> We are not seeing large numbers of foreclosure sales in
>> such areas.
>>
>
> OK, well I did a search and this is the first page i looked at.
>
The second one I looked at shows this ::
Ethnicity Counts When It Comes To Higher-Priced Subprime Loans
Those in the subprime category typically pay the highest rate because of
the risks they pose; not only a risk that they won't pay on their obligation
but that they will be **more likely to prepay their mortgages ahead of
schedule*** once they have cleaned up their credit, build up equity or
increased their income.
-------
This flexibility in lending, however, carries a lot of concerns about
fairness. First, are borrowers being shunted into high-priced loans based on
discriminatory criteria such as race or ethnicity? Second, do those persons
receiving high-priced loans have the resources (time, information, financial
savvy) to shop wisely for their loan, and third, is competition adequate to
assure that those borrowers most likely to be extended high-priced products
have the full range of credit opportunities.
The report states that the nonprime market has grown dramatically in recent
years and quotes one source as saying that, from 1994 to 2005 the dollar
volume of subprime loans increased from $35 billion to over $600 billion and
subprime loans are now estimated to make up 20 percent of all mortgage
originations compared to less than 5 percent in 1994.
---------------
Subprime loan originations do not correspond exactly with those loans
defined as having prices exceeding the threshold as defined by Regulation C,
however the latter increased significantly in 2005 over 2004 figures. For
example, the incidence of higher-priced lending for conventional,
owner-occupied, first-lien home-purchase loans rose from 11.5 percent in
2004 to 24.6 percent in 2005. This increase, however, was driven in part by
the flattening of the yield curve, by the yield curve coupled with an
artifact of the way APRs on adjustable rate loans are determined, and
borrower or lender-specific changes in the risk characteristics of lending.
***These changes in risk characteristics were in part because substantial
increases in house prices in some parts of the country caused more borrowers
to stretch financially to obtain loans. *** !!!!!!!
The 2005 HMDA data indicate that black and Hispanic borrowers are more
likely, and Asian borrowers less likely to obtain loans that cost more than
the pricing thresholds than are non-Hispanic white borrowers. The gross mean
incidence of higher-priced lending for home purchases was 54.7 percent for
blacks and 17.2 percent for non-Hispanic whites. When the analysis took into
account variables other than race that effect either borrower or lender this
37.5 percentage point difference is reduced to about 10 percentage points.
When it comes to refinancing the gross difference between blacks and
non-Hispanic whites is 28.3 percent but this is reduced to 6.2 percentage
points after controlling for borrower and lender factors.
The study found little difference in pricing when borrowers are
distinguished by gender. Sole female borrowers generally have a slightly
lower incidence of higher-priced lending than sole male borrowers for
home-purchase loans but a slightly higher incidence for refinancing.
As with pricing, controlling for other borrower and lender variables reduced
the disparity in denial rates. For example, blacks had a gross denial rate
for first-lien home purchase loans of 27.5 percent compared to 12.3 percent
for non-Hispanic whites. Accounting for income, loan amount, and other
borrower-related factors reduces the difference by 3.1 percentage points and
adding lender factors to the control reduces the gap to 7.0 percentage
points. Refinancing patterns were very similar.
Denial rates were higher for sole male borrowers than sole females but the
sizes of the differences were small.
This is an extremely dense 45 page report and we have only skimmed the
surface of the information is provides. The full report can be read at
www.federalreserve.gov/pubs/bulletin/2006.
------------------------------------------------------------------------------------------------------------------------------
Sean:
So the subprime lending increased 1700% in $ terms, and 400% in total % of
the market in 10 years to 2005. That's some leap.
Due to the huge increase in the market, the *real estate bubble* led by
extended unnaturally low FED Rates , and ease of credit across the board,
also caused "substantial increases in house prices in some parts of the
country caused more borrowers to stretch financially to obtain loans." =
more sub-prime loans across the board!
The report also clearly stated that :: "Applicants who are less creditworthy
or who are unwilling or *unable* to document their creditworthiness or
income are increasingly less likely to be turned down for a loan; rather
they are offered credit at higher prices." = a more expensive repayments
forever for the same value home.
next : "do those persons receiving high-priced loans have the resources
(time, information, financial savvy) to shop wisely for their loan," ????
Then on top this info, one needs to consider the effect of the high increase
in Low-Rate Introductory ARM loans that were set to balloon by 5-7% interest
from 2007 & 2008. In some cases these adjustable interest loans meant
Monthly repayments ballooning anywhere between 25 to 50% Higher than when
the loan was first obtained.
Which brings us back to what were they told about their loans by the
salesman, or the rep at the time of the application, and how many of these
subprime lenders were FIRST TIMERS and did "those persons receiving
high-priced [ARM] loans have the resources (time, information, financial
savvy) to shop wisely for their loan," ????
Now if both Clinton and Bush wanted to expand the numbers of Loans going to
Minority and low income people in the USA, then surely these goals have been
achieved. But what is the use of that, if people being given loans are not
in a position to afford them in the first place?
Did the Govt force these lenders to give these loans, or is the
responsibility squarely on the shoulders of the lenders themselves for
failling to do due dilligence and/or fully informing their custormers?
The levels of arrests for mortgage fraud may suggest the later in many
cases. ----------- see below example of Arbor that is one example of rampant
activity in recent years.
Then again, maybe these shrewd poor people who have never had a home loan
before in their life, or expoerienced their parents or family getting home
loans before, were just laying in wait to take advantage of both the
government and the world's leading bankers and mortage lenders.
Cunning bastards that they are. Who'd have expected that? :)
---------------------------------------------------------------------------------------
Monday, December 01, 2008
Settlements Reached In Colorado Mortgage Fraud Cases
Arbor Financial, Inc., Denver, Colorado, and 5280 Financial Group,
andMortgage Toolbox, Centennial, Colorado, have agreed to settlements with
the Colorado Attorney General John Suthers that will eliminate the deceptive
use of teaser rates mortgage loan advertisements.
Each of the three companies ran ads in the "Mortgage Marketplace" sections
of the Denver Post and Rocky Mountain News, advertising low teaser rates
and/or low minimum monthly payments associated with option ARM loans.
Disclosures of true interest rates and other terms were buried in agate
footnotes, if included at all. Several of the brokers interviewed during the
course of these investigations remarked that these advertisements "made the
phones ring."
As part of the settlements, each of the brokers has agreed to advertise only
traditional fix rate loans or traditional ARMs, not option ARMs. The firms
also have agreed to include certain disclosures about material loan terms in
readable print. Finally, the brokers must ensure at least 24-hours prior to
closing, each borrower will be provided with a copy of the Consumer Handbook
on Adjustable Rate Mortgages.
The Attorney General has filed civil claims under the Colorado Consumer
Protection Act against Home Mortgage Solutions, Inc., Englewood, Colorado,
and three associated individuals: owners Toan Le (aka James Le) and An
Nguyen, and general manager Leonard Smith.
Home Mortgage Solutions allegedly used direct mail to market risky option
ARM loans to borrowers without disclosing the associated risks. The
complaint alleges that Home Mortgage Solutions misrepresented the low
introductory rate as a permanent interest rate, and made refinancing nearly
impossible with prepayment penalties, facts which Home Mortgage Solutions
failed to disclose to borrowers.
In another action, Attorney General Suthers has reached a settlement with
Englewood's Encore Lending, LLC, and one of its owners, Paul Baker, for
depositing money into borrow accounts and inflating their incomes to qualify
them for larger loans. Baker has agreed to surrender his mortgage broker
license.
The Attorney General has also reached a settlement with Sacramento,
California-based mortgage broker Tri-Point Realty, which sent letters to
Colorado homeowners that appeared to be from a homeowner's bank. The letters
urged the homeowner to refinance to take advantage of his home's increased
value. Tri-Point, however, had no affiliation with the lender and did not
conduct any research to determine if the home had actually increased in
value.
Mail that appears to come from the government or a homeowner's bank is more
likely to opened and considered by the homeowner, and thus places honest
advertisers at a disadvantage. The settlement prohibits Tri-Point from
further misrepresentations in its advertisements.
------------------------------------------------------------------------------
AND FBI investigating IndyMac for fraud
The defunct IndyMac Bancorp is under investigation by the FBI for possible
fraud in home loans made to risky borrowers, The Associated Press has
learned.
It was not immediately clear how long the FBI probe of the bank has been
going on.
The investigation is focused on the company - which was taken over last
Friday by the Federal Deposit Insurance Corporation - and not individuals
who ran it, a law enforcement official said Wednesday. The official spoke on
the condition of anonymity because he was not authorized to speak publicly
about the investigation.
During the past year, and faced with a cratering housing market, the FBI has
opened a wide-ranging probe of companies across the financial services
industry, from mortgage lenders to investment banks that bundle home loans
into securities sold to investors.
Countrywide Financial, the largest U.S. mortgage lender, is also under
scrutiny.
Additionally, two former Bears Stearns managers were indicted last month on
conspiracy and securities and wire fraud charges alleging they lied to
investors in a hedge fund that tanked last year as the subprime market
collapsed. Those charges marked the first criminal charges to arise on Wall
Street from the subprime mortgage debacle.
In all, the FBI is now investigating 21 companies tied to the subprime
mortgage crisis, up from 19 last month. Authorities are looking into at
least 1,400 U.S. mortgage fraud cases, and more than 400 real estate
industry players have been indicted since March.
The FBI director Robert Mueller has said that the investigations focused on
accounting fraud, insider trading, and failure to disclose the value of
mortgage-related securities and other investments. Losses homeowners and
other borrowers are estimated at more than $1 billion.
http://www.iht.com/articles/2008/07/16/business/16IndyMac-303783.php
------------------------------------------------------------------------
Mortgage Fraud and Collateralized Debt Obligations
http://www.flippingfrenzy.com/2008/10/16/mortgage-fraud-and-collateralized-debt-obligations/
Finally for Michigan, a Multi-Agency Mortgage Fraud Task Force
As mortgage fraud continues to have significant consequences that affect
the housing market, law enforcement in Michigan has decided now is the time
to formally step up its commitment to fighting what for the last three years
has been the fastest-growing white collar crime in America.
Recognizing that roughly 90% of all reported real estate and mortgage fraud
losses involve collaboration or collusion by real estate industry insiders,
the Mulit-Agency Mortgage Fraud Task Force will concentrate their efforts on
fraud for profit, which everyone knows by now involves the skimming of
equity, falsely inflating the value of the property through false
appraisals, and the issuance of loans on fictitious properties.
---------------------------------------------------------------------------
AND
March 13, 2008
Update On FBI's Subprime Criminal Fraud Investigations
One problem with the lax underwriting standards for residential mortgages
that became common with the explosion of subprime lending, was an increase
in the potential for mortgage fraud. Perhaps foreshadowing the meltdown in
the securitized mortgage market in mid-2007, the FBI began receiving huge
increases in reports of mortgage fraud, and its investigations into
potential fraud increased 237% between 2002 and 2006. The FBI's May 2007
detailed report on mortgage fraud is available here.
The trend continued in 2007. The FBI opened 1,210 mortgage fraud cases in
fiscal year 2007, nearly triple the number of new cases in 2003. Convictions
more than doubled from 123 in the 2006 fiscal year to 260 in 2007. "We
expect that number to increase again in 2008," says FBI financial crimes
section chief Sharon Ormsby. (See here andhere.)
The FBI has also initiated criminal investigations in areas that are
typically left to the province of SEC, which can only impose civil liability
and penalties. In the past several weeks it has been reported (here and
here) that the FBI initiated criminal investigations of 16 different
corporations, such as investment banks and mortgage lenders. This week, it
was reported that Countrywide is one of the targets of FBI criminal
investigations. Add potential criminal liability to the host of civil claims
Countrywide already faces arising out of its subprime mortgage lending.
http://www.fbi.gov/publications/fraud/mortgage_fraud06.htm
http://www.usatoday.com/news/nation/2008-01-13-mortgagescams_n.htm
http://www.washingtonpost.com/wp-dyn/content/article/2007/12/05/AR2007120502612.html
AND OCT 2008
Feds probe Countrywide's 'VIP' program
Posted on Thursday, October 30, 2008 7:03 AM ET
Filed Under: Politics
By Lisa Myers & Amna Nawaz, NBC News
The wide-ranging criminal investigation into wrongdoing at Countrywide -
once the nation's largest mortgage originator - now includes serious
scrutiny of a loan program that provided special mortgage deals to the
well-connected and powerful, including two U.S. senators.
NBC News has learned that Robert Feinberg - a former Countrywide loan
officer who handled what were known as the "VIP" mortgages - spent six hours
last Thursday with a six-person team from the Justice Department. The team
included prosecutors from the Public Integrity section, which handles
investigations of possible public corruption.
http://deepbackground.msnbc.msn.com/archive/2008/10/30/1613877.aspx
tg
wrote:
> "James A. Donald" <jam...@echeque.com> wrote in messagenews:mpqmj41550fg8lv3a...@4ax.com...
>
>
>
> > patmpow...@gmail.com wrote:
> >> but it was the bad mortages getting AAA ratings and
> >> general fraud that made it so bad.
>
> > But the fraud was not general. The fraud was located in
> > very specific suburbs.
>
> > By and large, the default mortgages were fraudulent, and
> > when housing prices fell, all fraudulent mortgages
> > defaulted. You will notice that there is freeway
> > running through Palo Alto. West of the freeway, live
> > whites and unprotected minorities. East of the freeway,
> > live members of protected minorities. Fraudulent
> > mortgages were massive on one side of the freeway,
> > insignificant on the other side.
>
> > Fraudulent mortgages are for the most part affirmative
> > action mortgages - fraudulent mortgages are mostly
> > issued to the same people to whom fraudulent degrees are
> > issued.
>
> So it was these people that were either more gullible and naive, or were
> perhaps specifically targetted in an advertising and sales gimmick to
> consciously SELL FRAUDULENT MORTGAGES.
>
> Which would actually prove a case of minority targetted predatory lending,
> as opposed to being a "protected" group. IOW it may well prove to be racial
> discrimination, and not affirmative action at all.
>
Of course, Sean, but these guys have never heard of Occam's Razor.
Real estate speculation games (ones right on the border of legality,
like this) are **always** played in poorer neighborhoods. The profits
to be made are high, and the risks are low.
First, you can be assured that you have a pool of people ignorant of
the whole business of home ownership---that is, to include the
extended family that might give advice as in a middle class milieu.
Second, the properties are cheap, and flipping, which is perhaps an
underreported factor so far in ballooning the prices, is easy for the
savvy operator. No real risk if you know what you are doing and know
some people like inspectors.
Historical Note: The older version involved moving some black people
into a white working-class urban neighborhood to cause white flight to
depress prices while buying up chunks of triple-deckers. Then you let
everything fall to pieces (while charging rent of course) and in 10-15
years begin the 'gentrification' process where you sell the same
buildings to yuppies for an enormous profit.
See, even the crooks used to have a long-term outlook. How times have
changed. ;-(
-tg
-tg
sorrpoint
"tg" <tgde...@earthlink.net> wrote in message
news:70b1fa92-4f83-4bec...@q9g2000yqc.googlegroups.com...
-------------------------
Sean: Yes good points, and what I would call, um so damn obvious, but i
appreciate that it does get overlooked. That is needs to be pointed out just
gets so damn depressing with the level of ignorance and bigotry out there.
This isn't hard to understand, and yet by god it is!! :)
You know we had a real estate bubble here in the late 80's with relatively
high interest rates that "should have gone down" .... I had a mortgage for 5
years, and then sold and bought two properties which i rented when i was
transferred interstate. I'm white, college educated, running a $40
million/year operation with 800+ staff under me ... and I got "sold" and
"screwed over" in the new mortgages I took out, where interest rates went to
22% within a year of taking them out. I lost one of the homes, but luckily I
did buy well, and got my money back less a year of payments.
IF I had had my head screwed on properly I would have stuck with my existing
Bank, and rates would only have gone to 15% max, and if I was really sharp I
would have taken a 3 year fixed at 11.5%.
But I didn't ..... so I got screwed from all sides instead. What's my
excuse? Our Treasurer was encouring people like me to "invest in the our
future financial health and buy investment properties to rent out long term
..... "
Bloody Government, it was THEIR fault I got the Mortgages and lost one of my
homes .... and it was the beachfront one that now would be worth um .....
$1.5 million. I sold it for $81,500 19 years ago.
You do the math ..... :)
---------------------------------
Second, the properties are cheap, and flipping, which is perhaps an
underreported factor so far in ballooning the prices, is easy for the
savvy operator. No real risk if you know what you are doing and know
some people like inspectors.
Sean: YES ... same stuff happens here all the time when they can get away
with it. $ makes $, end of story.
----------------------
Historical Note: The older version involved moving some black people
into a white working-class urban neighborhood to cause white flight to
depress prices while buying up chunks of triple-deckers. Then you let
everything fall to pieces (while charging rent of course) and in 10-15
years begin the 'gentrification' process where you sell the same
buildings to yuppies for an enormous profit.
See, even the crooks used to have a long-term outlook. How times have
changed. ;-(
-tg
-------------------------
Sean:
YES, absolutely. Now just a cpl moths ago, there was this older doco on TV
about the historical journey of blacks in the usa trying to buy real estate
thru the 20th century ... and all the BS that went on, just as you describe
above. Plus how even the govt depts blatantly manipulated the system to
restrict anything like a level playing field. So many examples of
discrimination and ripp-offs I can't recall all of them, but it sure gave me
a sick feeling in the stomach.
I've read Foner's America's Black Past, about Fed. Justice Robert's[?]
during the civil rights period, and Malcolm X's bio, spent time with various
black & white folks in florida, and much more ... all tells a tale.
Even a blind man can see bigotry and racism when it's there -- who needs
occams razor to get it? Of course not all are man enough to try. :)
sorrpoint
> "sorrpoint"
>> IOW Jim and others are suggesting that the PRIMARY cause of the Subprime
>> collapse [ and therefore the whole Financial Crisis that flows from
>> Subprime
>> in the USA alone ] is because Mortgage Lenders were FORCED BY THE
>> GOVERNMENT
>> to LOWER their standards of issuing Home Loans to Minorities and Low
>> Income
>> people
>>
>> [...]
>>
>> BUT here are some FACTS to consider here::
>>
>> A Snapshot of the Subprime Market November 28, 2007
>>
>>
>> http://209.85.173.132/search?q=cache:NqAH9QxF_ugJ:www.responsiblelending.org/pdfs/snapshot-of-the-subprime-market.pdf+subprime+arm+resetting+interest+rates+2006&hl=en&ct=clnk&cd=9&gl=au
>
> Which examines the defaults and the subprime market in every way,
> breaking it down by this category, that category, and the other
> category, with the striking omission that it fails to break it down by
> race.
>
> That striking omission is the dog that did not bark.
>
Maybe just like the magic "invisible hand" of the markets, the dog does not
actually exist as an issue?
I think the most important thing not to omit would be this hard fact about
subprime loans in general, no matter who obtained them ..... black, blue or
brindle.
"Low initial rates on ARMs reflected aggressive pricing by lenders,
particularly for nonprime
products. The real cost of these products was hidden by larger upfront fees
and
prepayment penalties designed to prevent refinancing after the initial
interest rates were reset to variable rates. The effect of structuring the
loans this way was to delay the real servicing
obligation of the loans past the initial few years."
Once this initial 2 year rolling period began to occur, the shit hit the fan
and hasn't yet stopped.
And remember I mentioned that something significant changed in 2003?? It
wasn't anything to do with CRA or affirmative action towards minorities by
the govt of the day. It was this ::
"ARMs became increasingly popular in the US from 2003.
They are often referred to as 2/28 and 5/25 loans indicating that the
initial two or five year periods
are fixed before the interest rate is reset to a much higher variable rate."
Defaults began sky-rocketing by 2006 as soon as these ARM's re-set and
borrowers were severly restricted from re-financing by their lender's Loan
Contract conditions that they had offered their sub-prime clients.
These re-setting ARM's are still unfolding by the million right now. These
Loan agreements happen to be colour blind as well. The effect is the exactly
the same whether one is Hispanic, Black, or Nordic.
Andy F.
> tg <tgde...@earthlink.net> wrote:
>> As has been pointed out fairly often now, the
>> likeliest culprit for the bad loans themselves was the
>> ability of lenders to securitize the loans, which gave
>> them incentive to make as many loans as possible, and
>> *as little* incentive as possible to care if they were
>> ever repayed.
>
> And what was it that gave them incentive to make such
> loans primarily to members of protected minorities?
>
> If it was securitization to blame, why are we not seeing
> a wave of similar defaults in suburbs such as west Palo
> Alto that have very few members of protected minorities?
>
> Agreed, securitization was a really bad idea - but what
> makes it bad is that the regulators could foist
> affirmative action loans on investors, and investors
> would not realize how badly they were being burnt by
> affirmative action.
>
> That the rating agencies rated crap securities AAAAA may
> well be because they are corrupt - but they are corrupt
> because the regulators *needed* them to be corrupt -
> because the officers of an honest rating agency would be
> facing lawsuits as racists.
>
of racism or threatened with lawsuits?
Shrik...@gmail.com
wrote:
> <Shrikeb...@gmail.com> wrote in message
>
> news:0a9da79e-b619-4584...@p2g2000prf.googlegroups.com...
> On Dec 5, 3:35 am, tg <tgdenn...@earthlink.net> wrote:
>
> > On Dec 4, 11:54 pm, "sorrpoint" <Relax...@theBeach.DownUnder.org>
> > wrote:
>
> Anyway, fortunately, I am now in the regulation
> bidness. I'll be making sure it doesn't become
> a bubble by developing a system of self-replicating
> regulations, such that they are fruitful and
> exponentiate until they are so thick in everyone's
> guts that they are even regulating all of our bodily
> functions. It'll be too big to fail then, that's for
> sure. Be careful what you wish for, control freaks!
>
> ----------------------------------------------------------------------
>
> Sean:
>
> Well I am pretty confident that I could say there are about 2 million
> families out there who still wished they had their own home, and at least 1
> million this last year who wished they still had a job, and millions who
> wished their Share Portfolios were worth even half what they were in january
> 2008, and there's maybe 30 million at least who;d be wishing they had more
> left in their Pension Funds than they do now a few years or months before
> retiring ...... and I bet every single person who had shares or assets in
> Lehmanns had gone to Vegas instead ... as it would have been a much safer
> bet there with at a chance of a return, vs ZERO.
And, goddammit, Captain America of the legislation world
is going to fix those problems! Faster than galloping
socialism. More powerful than the Mayor of Chicago.
Able to leap across five year plans with a single bound!
> So by all means rag the calls for some rational balanced Regulation against
> the merchants of Doom who have moved to the Caymans and Bahamas with all the
> loot they made in the last few years on the backs of everyday working
> people, the mums and pops, brothers and sisters, and friends of everyone
> whoever posted to a newsgroup.
When control freaks bleat and bleat the same old sheep song,
I don't expect rational or balanced. I expect they hope for an
even more Kafka-esque mileiu of hyperregulation.
Note that the markets that failed are the most regulated we
have. Other, less regulated, sectors were doing pretty well.
Our profits were up 20% over last year. America has more
lawyers per capita than Australia has bugs and poisonous
snakes. We are the regulated ones. Now go back to your
Asstrological chart and figger out when Nostradamus second
coming is to be expected.
James A. Donald
> http://query.nytimes.com/gst/fullpage.html?res=9402E5DF153BF936A25753C1A9619C8B63&sec=&spon=&pagewanted=all
> The analysis showed that even when median income
> levels were comparable, home buyers in minority
> neighborhoods were more likely to get a loan from a
> subprime lender.
In this case "subprime" means "no money down". You are
measuring affirmative action privilege granted to
members of protected minorities, not discrimination
against them. Whites got fewer subprime loans because
in order to get a no money down loan, they had to
provide evidence of solvency and good credit rating,
whereas a member of a protected minority merely had to
be sober enough to hold a pen without falling down.
James A. Donald
> > Fraudulent mortgages are for the most part
> > affirmative action mortgages - fraudulent mortgages
> > are mostly issued to the same people to whom
> > fraudulent degrees are issued.
"sorrpoint"
> So it was these people that were either more gullible
> and naive
They were the beneficiaries of the fraud, not the
victims. They got free houses. The people who wind up
paying for the houses - taxpayers, a disproportionately
white and male group - are the victims.
The government decided that sufficient qualified members
of protected minorities must exist. It commanded
financiers to find them, whether they existed or not -
thereby forcing financiers to fraudulently qualify these
people as solvent, much as universities fraudulent
qualified them as educated.
> Which would actually prove a case of minority
> targetted predatory lending
A no money down loan to someone who has neither the
means or the inclination to repay it is not predatory.
The recipient of such loan is the predator.
A loan can only be predatory if the borrower puts up
some equity, which the loan pisses away - such loans are
made primarily to whites and members of unprotected
minorities. Members of protected minorities generally
got no money down loans.
James A. Donald
<tgde...@earthlink.net> wrote:
> Of course, Sean, but these guys have never heard of
> Occam's Razor. Real estate speculation games (ones
> right on the border of legality, like this) are
> **always** played in poorer neighborhoods. The profits
> to be made are high, and the risks are low.
Why is it more profitable to buy a house with no money
down in a poor neighborhood than a rich one? If the
borrower follows a strategy that if the house
appreciates he wins, if the house depreciates he gets
rent free accommodation until the lender repossesses,
the strategy works better in a rich neighborhood than a
poor one.
The reason that most of the defaults are happening in
poor neighborhoods is that 99% of the defaulters were
given loans through affirmative action. Many of these
defaulters used these loans to buy homes in better
neighborhoods than they would ordinarily live in - for
example Sunnyvale saw a huge influx of Mexicans from
Gilroy and San Jose.
James A. Donald
> > Easy money, not affirmative action made the bubble.
> >
> > to lock up.
"sorrpoint"
> How do separate the two issues like that?
The collapse of the bubble is not causing significant
numbers of white borrowers to default, nor borrowers
that are members of unprotected minorities to default.
We can see this by looking at foreclosures in white
suburbs - or rather the absence of foreclosures in white
suburbs: <http://www.sfgate.com/webdb/foreclosures>
Something like 99% of the defaults are by members of
protected minorities, therefore are affirmative action
loans - therefore without affirmative action loans, the
collapse of the bubble would not have resulted in the
wave of defaults that collapsed the financial system.
Michael Coburn
> On Sun, 7 Dec 2008 05:08:03 -0800 (PST), tg <tgde...@earthlink.net>
> wrote:
>> Of course, Sean, but these guys have never heard of Occam's Razor. Real
>> estate speculation games (ones right on the border of legality, like
>> this) are **always** played in poorer neighborhoods. The profits to be
>> made are high, and the risks are low.
>
> Why is it more profitable to buy a house with no money down in a poor
> neighborhood than a rich one? If the borrower follows a strategy that
> if the house appreciates he wins, if the house depreciates he gets rent
> free accommodation until the lender repossesses, the strategy works
> better in a rich neighborhood than a poor one.
>
> The reason that most of the defaults are happening in poor neighborhoods
> is that 99% of the defaulters were given loans through affirmative
> action. Many of these defaulters used these loans to buy homes in
> better neighborhoods than they would ordinarily live in - for example
> Sunnyvale saw a huge influx of Mexicans from Gilroy and San Jose.
You seem to be very inconsistent with your racial prejudices and your
scapegoating. The fact is that there was no discrimination on the loans
and the major problem areas are not in the inner city areas typically
covered by the CRA. It seems to be very upsetting to you that the loan
hucksters used minorities in their lust for a quick buck. You seem to
want to blame the minorities for wanting to improve their circumstances
while turning a blind eye to the non-regulation that allowed and
encouraged the lending. I will not debate the issue in that you have a
religious conviction that is immune to rationality. But the point I have
made needs to be made in the midst all of your irrationality.
Sean
There is "regulation" and then there is rational sane workable and
excellently targetted Regulation. You have the model called USA
Regulation. That is what does not work, because it;s setup to fail,
and fail, and to fail and to eventually lead to a financial meltdown.
Now, I hate ot point out the bleeding obvious, but the FED is supposed
to be the Financial Regulator to *ensure* the stability of the
financial system. It has failed, and it has failed due to ineffective
REGULATION and lack of ENFORCEMENT.
All your bleeting that "regulation" is bad bad bad is simply a serious
level of denial, that is not uncommon in the USA and Congress in
particular. Basically ya just don't have a clue what you are doing,
because if you did the current shit fight and the damage done thus far
would NEVER have occurred.
It isn't rocket science, really it is not.
Have nice ideological day anyway.
Sean
> On Sun, 7 Dec 2008 20:25:51 +1100, "sorrpoint"
>
> > The analysis showed that even when median income
> > levels were comparable, home buyers in minority
> > neighborhoods were more likely to get a loan from a
> > subprime lender.
>
> In this case "subprime" means "no money down".
Now, that is just a lie, or at best a hopeful guess .
> You are
> measuring affirmative action privilege granted to
> members of protected minorities, not discrimination
> against them.
So you say, but that does not make it true or even accurate.
> Whites got fewer subprime loans because
> in order to get a no money down loan, they had to
> provide evidence of solvency and good credit rating,
> whereas a member of a protected minority merely had to
> be sober enough to hold a pen without falling down.
>
Which is of course another lie, and another example of the level of
ignorance about your own financial system and laws and how they
operate on the ground. of course if you just "looked" it would all
become clearer despite the complexities and mis-information out
there.
Sean
> "James A. Donald":
>
> > > Fraudulent mortgages are for the most part
> > > affirmative action mortgages - fraudulent mortgages
> > > are mostly issued to the same people to whom
> > > fraudulent degrees are issued.
>
> "sorrpoint"
>
> > So it was these people that were either more gullible
> > and naive
>
> They were the beneficiaries of the fraud, not the
> victims. They got free houses. The people who wind up
> paying for the houses - taxpayers, a disproportionately
> white and male group - are the victims.
>
So now it's "fraud" and not minority affirmative actions?
And obviously what you are about is indeed blatant bigotry and racist
behaviour tinged with bitterness and blame, which is FAR different
than your previous claims.
> The government decided that sufficient qualified members
> of protected minorities must exist. It commanded
> financiers to find them, whether they existed or not -
> thereby forcing financiers to fraudulently qualify these
> people as solvent, much as universities fraudulent
> qualified them as educated.
>
SHOW ME THE LAW .... show me the Command where the Govt forced the
lenders to offer FRAUDULENT loans to anyone, black blue or brindle.
> > Which would actually prove a case of minority
> > targetted predatory lending
>
> A no money down loan to someone who has neither the
> means or the inclination to repay it is not predatory.
> The recipient of such loan is the predator.
>
THAT is clearly a deluded comment. Polish up on your logic and
reasoning.
> A loan can only be predatory if the borrower puts up
> some equity, which the loan pisses away - such loans are
> made primarily to whites and members of unprotected
> minorities. Members of protected minorities generally
> got no money down loans.
>
SHOW ME THE PROOF OF THAT ... and SHOW ME the LAW that forced lenders
to GIVE fraudulent UN-re-payable loans to minorites.
Sean
> On Sun, 7 Dec 2008 05:08:03 -0800 (PST), tg
>
> > Of course, Sean, but these guys have never heard of
> > Occam's Razor. Real estate speculation games (ones
> > right on the border of legality, like this) are
> > **always** played in poorer neighborhoods. The profits
> > to be made are high, and the risks are low.
>
> Why is it more profitable to buy a house with no money
> down in a poor neighborhood than a rich one? If the
> borrower follows a strategy that if the house
> appreciates he wins, if the house depreciates he gets
> rent free accommodation until the lender repossesses,
> the strategy works better in a rich neighborhood than a
> poor one.
>
> The reason that most of the defaults are happening in
> poor neighborhoods is that 99% of the defaulters were
> given loans through affirmative action. Many of these
> defaulters used these loans to buy homes in better
> neighborhoods than they would ordinarily live in - for
> example Sunnyvale saw a huge influx of Mexicans from
> Gilroy and San Jose.
If you are trying to prove that the white race is smarter and more
self-reliant and self-responsible, you are doing a really bad job of
it.
Sean
> "James A. Donald"
>
> > > Easy money, not affirmative action made the bubble.
>
> > > Affirmative action however caused financial markets
> > > to lock up.
>
> "sorrpoint"
>
> > How do separate the two issues like that?
>
> The collapse of the bubble is not causing significant
> numbers of white borrowers to default, nor borrowers
> that are members of unprotected minorities to default.
That is totally incorrect. IOW it is simply NOT TRUE, and either a
lie, or a gross mis-representation of the actual known facts
> We can see this by looking at foreclosures in white
> suburbs - or rather the absence of foreclosures in white
> suburbs: <http://www.sfgate.com/webdb/foreclosures>
>
> Something like 99% of the defaults are by members of
> protected minorities, therefore are affirmative action
> loans -
WRONG again .... you have yet to PROVE that loans to any minority IS
an affirmative action loan to each individual borrower.
SHOW ME THE LAW, and then show me the DATA and EVIDENCE that proves
99% of loans to Defaulters are in FACT affirmative action governed
loans.
therefore without affirmative action loans, the
> collapse of the bubble would not have resulted in the
> wave of defaults that collapsed the financial system.
>
SHOW ME THE FACTS that support this belief of yours.
Sean
> On Tue, 09 Dec 2008 10:49:26 +1000, James A. Donald wrote:
Well said, and wholly accurate. Especially the "irrationality" of it
all, given the known facts of both the bubble collapse and the
subsequent defaults on loans.
James A. Donald
> > And what was it that gave them incentive to make
> > such loans primarily to members of protected
> > minorities?
"sorrpoint"
> How about general inexperience and gullibility of the
> minorities not usually being sold the goose that will
> lay their golden egg?
The point of these loans was to benefit the recipients,
by magicing them into the middle class without the
inconvenient and terribly racist and sexist necessity of
working or saving. The recipients at best made several
hundred thousand dollars without the inconvenient
necessity or work or thrift or risk, as the ones that
got on the gravy train between 2000 and 2005 did, and at
worst they got the use of a nice house for six to nine
months free of charge, as the ones that attempted to get
on the gravy train in 2006-2007 did.
James A. Donald:
> > If it was securitization to blame, why are we not
> > seeing a wave of similar defaults in suburbs such as
> > west Palo Alto that have very few members of
> > protected minorities?
"sorrpoint"
> They got better deals offered to them by other
> lenders, or their personal banks when they wanted to
> buy a new home or re-finance their existing home.
California is a no recourse state. So if a white
millionaire could buy a house no money down, and then
default should the bubble burst, they cannot go after
his millions - at least not if he has been cautious. So
a white californian millionaire who can borrow no money
down has the same incentive to default in a housing
bubble as a black hobo. Heads he wins, tails the
taxpayer loses. The rarity of white defaults shows that
whites could not borrow no money down, and members of
protected minorities *could* borrow no money down.
> Non-affirmative action loans also are under water.
If non affirmative action loans were defaulting, we
would see defaults in places like Palo Alto west of the
freeway. We don't.
Non affirmative action loans are not under water, or not
very far under water, because white borrowers had to put
some money down.
> The other issue that should be seriously considered
> and remembered is the ease at which borrowers can just
> walk away from a home when the house prices drop.
But white borrowers are not walking away - as we can see
from <http://www.sfgate.com/webdb/foreclosures/> Lily
white suburbs have very few foreclosures.
No recourse, no money down loans were for members of
protected minorities, not for white people. White
people could only get 100% loans if the loan was
recourse based and the white person had substantial
assets, meaning that the loans were not really 100%.
The white guy had to bring some assets to the table, one
way or another way. Members of protected minorities did
not.
> Another is the accepted way that existing home
> re-financing occurs when "values" increase, where the
> majority of the risk falls onto the the lender and not
> the borrower should the values decline
But that is only for affirmative action loans. Loans
made to white people put all the risk of depreciation on
the borrower, and all gains of appreciation. As you can
see from the foreclosure rates, lenders are not in
trouble for loans they made in lily white suburbs.
But since the purpose of an affirmative action loan is
to benefit the borrower, to magic him into the middle
class without work or risk or thrift, the way
affirmative action loans worked is that all the gains
accrued to the borrower, and all the risk to the lender.
James A. Donald
> > in every way, breaking it down by this category,
> > that category, and the other category, with the
> > striking omission that it fails to break it down by
> > race.
> >
> > That striking omission is the dog that did not bark.
"sorrpoint"
> Maybe just like the magic "invisible hand" of the
> markets, the dog does not actually exist as an issue?
Suburbs that are lily white have foreclosure rates that
are a hundredth or less than foreclosure rates for
suburbs that are majority protected minority. Therefore
the issue does exist, and ignoring it like ignoring a
ranging elephant in the living room.
> I think the most important thing not to omit would be
> this hard fact about subprime loans in general, no
> matter who obtained them ..... black, blue or brindle.
Rather, the relevant measure is no money down loans,
loans where the borrower has no equity on the day he
moves in, which loans were made primarily to members of
protected minorities, and not to people of the incorrect
race.
> "Low initial rates on ARMs reflected aggressive
> pricing by lenders, particularly for nonprime
> products. The real cost of these products was hidden
> by larger upfront fees and prepayment penalties
> designed to prevent refinancing after the initial
> interest rates were reset to variable rates. The
> effect of structuring the loans this way was to delay
> the real servicing obligation of the loans past the
> initial few years."
>
> Once this initial 2 year rolling period began to
> occur, the shit hit the fan and hasn't yet stopped.
ARMs went primarily to white people, yet the shit has
not hit the fan. White people are not defaulting in
significant numbers.
James A. Donald
> > That the rating agencies rated crap securities AAAAA
> > may well be because they are corrupt - but they are
> > corrupt because the regulators *needed* them to be
> > corrupt - because the officers of an honest rating
> > agency would be facing lawsuits as racists.
"Andy F."
> Have you got any evidence of rating agencies being
> corrupt
We have ample evidence that rating agencies were corrupt
- the only question is motive. Did the people being
rated slip them some money, or did the government
threaten them with accusations of racism.
I have no direct evidence that the government threatened
them, but observe that no one in government proposing to
do anything about these flagrantly improper ratings -
which suggests that the guilt lies with the regulators,
rather than the regulated.
James A. Donald
> > > The analysis showed that even when median income
> > > levels were comparable, home buyers in minority
> > > neighborhoods were more likely to get a loan from
> > > a subprime lender.
James A. Donald:
> > In this case "subprime" means "no money down".
Sean
> Now, that is just a lie, or at best a hopeful guess .
The fingerprints of affirmative action are visible in
the default rate. Ninety nine percent of home purchase
mortgage defaulters appear to blacks and hispanics,
(from both personal observation, and from www.sfgate.com
statistics on which suburbs foreclosures are happening
in) therefore something like ninety nine percent of
people who got no money down loans are black and
hispanics, therefore whites and asians generally could
not get no money down loans, at least not without
bringing some assets to the table, and blacks and
hispanics generally could.
James A. Donald
> > <http://www.urban.org/UploadedPDF/mortgage_lending.pdf>
> >
> > They were looking for evidence of racism, and what they
> > came up with was mighty thin gruel.
> >
> > That this was a crisis of affirmative action lending is
> > illustrated by the difference between today's West Palo
> > Alto housing market, and today's East Palo Alto housing
> > market. The protected minorities live east of the
> > freeway, the whites and unprotected minorities live west
> > of the freeway. One side of the freeway, most of the
> > mortgages are in default. On the other side of the
> > freeway, housing market is normal.
"sorrpoint"
> So your personal direct anecdotal evidence counters the other persons
> personal direct anecdotal evidence.
The other person's anecdotal evidence is also inconsistent with
government reports that went looking for racism and found nothing very
convincing <http://www.urban.org/UploadedPDF/mortgage_lending.pdf>
And incompatible with the striking difference in foreclosure rates
between Palo Alto west of the free way and Palo Alto EAst of the
freeway, which difference is not an "anecdote" but a statistic:
> You both can't be right
One person is lying.
You can tell which one is lying from statistics:
Foreclosures in Palo Alto west of the freeway (white and
some chinese, chinese being an unprotected minority):
<http://www.sfgate.com/webdb/foreclosures/?appSession=89553824393898>
One foreclosure.
Foreclosures in Palo Alto east of the freeway (black and
hispanic, all protected minority):
<http://www.sfgate.com/webdb/foreclosures/?appSession=57553824890172>
ninety eight foreclosures.
and from the fact that government surveys went fishing for the racism
he claims he saw, and did not find it.
James A. Donald
> > The collapse of the bubble is not causing
> > significant numbers of white borrowers to default,
> > nor borrowers that are members of unprotected
> > minorities to default.
Sean
> That is totally incorrect. IOW it is simply NOT TRUE,
> and either a lie, or a gross mis-representation of the
> actual known facts
If whites were defaulting, we would see defaults in Palo
Alto west of the freeway as well as east of the freeway.
> you have yet to PROVE that loans to any minority IS an
> affirmative action loan to each individual borrower.
Obviously they made no money down home purchase loans to
members of protected minorities with no income, no job
or assets.
Equally obviously, they did not make such loans to
whites - if they had, we would be seeing a lot more
defaults in suburbs such as Palo Alto west of the
freeway.
> SHOW ME THE LAW,
All house purchase loans are governed by affirmative
action, for since 1999 CRA requires that race must be
reported on all house purchase loans, and regulators are
required to take the racial distribution all loans into
account when making all regulatory decisions - which
implies that if a banker does not make enough loans to
members of protected minorities he will be punished, but
to preserve deniability, nominally punished for
something completely unrelated to race.
Since not enough members of protected minorities
qualify, it follows that they have to make loans to
unqualified members of minorities.
> and then show me the DATA and EVIDENCE that proves 99%
> of loans to Defaulters are in FACT affirmative action
> governed loans.
All house purchase loans are governed by affirmative
action, every single one. It is the law in the US.
The fact that there are very few defaults in suburbs
with very few members of protected minorities
<http://www.sfgate.com/webdb/foreclosures/> shows that
no money down home purchase mortgages were not available
to whites with no income, no job or assets, and that
they were available to blacks and hispanic with no
income, no job or assets.
Everyone knows this is a race based crash, a product of
affirmative action in lending forcing loans to be made
to unqualified borrowers. Look at any talking head on
you tube pontificating about the crisis: you will notice
he speaks evasive waffle whenever the topic gets
anywhere near "who is defaulting" - because he knows
that to speak plainly would result in punishment. You
can hear his fear because he starts talking as if his
mouth was full of socks.
99% of the defaulters are members of protected
minorities <http://www.sfgate.com/webdb/foreclosures/>
We know that the defaulters mostly purchased houses no
money down and failed to provide evidence of income and
assets. If whites had been able to borrow on these
terms, significant numbers of whites would have borrowed
on similar terms, whereupon significant numbers of
whites would have defaulted when the bubble burst.
Michael Coburn
You are a total conspiracy theory nut case that is in deep, deep denial
over the fact that deregulation failed miserably.
> Since not enough members of protected minorities qualify, it follows
> that they have to make loans to unqualified members of minorities.
There was absolutely zero bias in the lending. The thieves would have
made loans to blow up dolls if they could have gotten away with it.
>> and then show me the DATA and EVIDENCE that proves 99% of loans to
>> Defaulters are in FACT affirmative action governed loans.
>
> All house purchase loans are governed by affirmative action, every
> single one. It is the law in the US.
That is horsecrap.
> The fact that there are very few defaults in suburbs with very few
> members of protected minorities
> <http://www.sfgate.com/webdb/foreclosures/> shows that no money down
> home purchase mortgages were not available to whites with no income, no
> job or assets, and that they were available to blacks and hispanic with
> no income, no job or assets.
You think a microcosm of loans is proof? It is proof to YOU because it
feeds you moronic idiotology.
> Everyone knows this is a race based crash, a product of affirmative
> action in lending forcing loans to be made to unqualified borrowers.
"everyone knows"? That is the real idiotology clencher.
> Look at
Followed by the "look at"
> any talking head on you tube pontificating about the crisis: you
> will notice he speaks evasive waffle whenever the topic gets anywhere
> near "who is defaulting" - because he knows that to speak plainly would
> result in punishment. You can hear his fear because he starts talking
> as if his mouth was full of socks.
>
> 99% of the defaulters are members of protected minorities
> <http://www.sfgate.com/webdb/foreclosures/> We know that the defaulters
> mostly purchased houses no money down and failed to provide evidence of
> income and assets. If whites had been able to borrow on these terms,
> significant numbers of whites would have borrowed on similar terms,
> whereupon significant numbers of whites would have defaulted when the
> bubble burst.
What a nut case.
James A. Donald
> > All house purchase loans are governed by affirmative
> > action, for since 1999 CRA requires that race must
> > be reported on all house purchase loans, and
> > regulators are required to take the racial
> > distribution all loans into account when making all
> > regulatory decisions - which implies that if a
> > banker does not make enough loans to members of
> > protected minorities he will be punished, but to
> > preserve deniability, nominally punished for
> > something completely unrelated to race.
Michael Coburn
> You are a total conspiracy theory nut case that is in
> deep, deep denial over the fact that deregulation
> failed miserably.
If deregulation caused this crisis, why no crisis in
white suburbs?
Despite the fact that the housing bubble burst, whites
are still making their mortgage payments. The breakdown
of foreclosures by suburb, <www.sfgate.com> and my own
personal observation of individual cases, indicates that
approximately ninety nine percent of the defaulters are
members of protected minorities.
James A. Donald:
> > Since not enough members of protected minorities
> > qualify, it follows that they have to make loans to
> > unqualified members of minorities.
Michael Coburn
> There was absolutely zero bias in the lending.
If no bias, why no significant numbers of whites
defaulting?
The people who got loans they had not the slightest
inclination to pay back are the same people who got
university degrees they cannot read and jobs they do not
or cannot perform.
Not performing the job is invisible except to coworkers,
but when the same process was applied to loans, it
became visible.
What is causing the financial crisis in America is the
same thing as is causing the cholera epidemic in
Zimbabwe.
When they gave a Noble prize to Marie Curie for being
female, that did not hurt anyone except more deserving
potential Noble prize winners - in particular her
father, who probably did not object. But handing out
phony Nobles on the basis of sex, race, and nationality
necessitated handing out phony degrees on the basis of
race and sex, and handing out phony degrees on the basis
of race and sex necessarily led to a crisis where these
phony degrees were being ignored by employers, so
employers necessarily had to be forced to give out well
paid jobs on the basis of race and sex.
But being given well paid jobs on the basis of race and
sex failed to result in recipients living a middle class
lifestyle, so lenders had to be forced to give out a
middle class lifestyle on the basis of race and sex.
Which has led to our present financial crisis. It all
began with Marie Curie. Each lie required a new and
bigger lie. We need to start by acknowledging that
genders and races tend to have different abilities -
that if you are looking for people that are the best at
something, whether the fastest runners or the greatest
mathematicians, they will almost all be of one
particular race and gender, and some races will be
completely absent, and if you are merely looking for
people that are acceptably good at something, for
example accountants, basketball players, or donut
makers, they will be mostly of one particular race and
gender.
We have to denounce each lie, going all the way back the
original lie, and expose it as the lie that it was. And
then, and only then, the crisis will end. No
denunciation of Marie Curie, no end to the crisis. We
cannot end the crisis unless we admit who is defaulting,
we cannot admit who is defaulting without admitting they
cannot perform their jobs either, we cannot admit they
cannot perform their jobs without admitting their
degrees are phony, and we cannot admit their degrees are
phony without admitting that many Noble prizes, starting
with Marie Curie, were phony.
Andy F.
> "James A. Donald
>> > That the rating agencies rated crap securities AAAAA
>> > may well be because they are corrupt - but they are
>> > corrupt because the regulators *needed* them to be
>> > corrupt - because the officers of an honest rating
>> > agency would be facing lawsuits as racists.
>
> "Andy F."
>> Have you got any evidence of rating agencies being
>> corrupt
>
> We have ample evidence that rating agencies were corrupt
> - the only question is motive. Did the people being
> rated slip them some money, or did the government
> threaten them with accusations of racism.
>
> I have no direct evidence that the government threatened
> them, but observe that no one in government proposing to
> do anything about these flagrantly improper ratings -
> which suggests that the guilt lies with the regulators,
> rather than the regulated.
>
James A. Donald
> prejudices and your scapegoating. The fact is that
> there was no discrimination on the loans
If there was no discrimination on the loans, why did so
few white default on their loans?.
If anyone of any race could buy a house with no money
down, despite having no income, no job or assets, then
when the bubble burst we would have seen comparable
numbers of people defaulting on in Palo Alto west of the
freeway as defaulting east of the freeway. Instead we
see one default on the west side (whites) and ninety
eight defaults on the east side (black and hispanic).
> and the major problem areas are not in the inner city
> areas typically covered by the CRA.
The CRA targets heavily minority areas, and in the Bay
Area, which is the area for which sfgate publishes
foreclosure statistics, the most heavily minority areas
are East Palo Alto, Gilroy, and Oakland - which are the
problem areas - which are the areas with the highest
rate of foreclosures by far.
James A. Donald
<sant...@yahoo.com> wrote:
> If you are trying to prove that the white race is
> smarter and more self-reliant and self-responsible,
My argument is that if whites could have bought houses
no money down with no assets they would have, and would
then default when the bubble burst.
Since whites are not defaulting, obviously they could
not get these easy money loans. These dud loans, the
loans that caused the crisis, were all affirmative
action loans, were loans that regulators forced lenders
to make to members of protected minorities.
My argument is that lenders loaned money to unqualified
borrowers for the same reasons as universities give
degrees to people who cannot read them: Affirmative
action.
If these dud loans were a result of deregulation rather
than regulation, the we would be seeing foreclosures in
white suburbs the way we are seeing foreclosures in
black and hispanic suburbs.
James A. Donald
> > They were the beneficiaries of the fraud, not the
> > victims. They got free houses. The people who wind up
> > paying for the houses - taxpayers, a disproportionately
> > white and male group - are the victims.
Sean
> So now it's "fraud" and not minority affirmative actions?
Affirmative action is fraudulent. When universities give degrees to
people barely literate, that is fraud. When big companies give people
jobs that they cannot do, that is fraud. And when lenders are forced
to pretend that unqualified borrowers are qualified, that is fraud.
> > The government decided that sufficient qualified members
> > of protected minorities must exist. It commanded
> > financiers to find them, whether they existed or not -
> > thereby forcing financiers to fraudulently qualify these
> > people as solvent, much as universities fraudulent
> > qualified them as educated.
> SHOW ME THE LAW
In 1999, CRA was strengthened in two way: All lenders had to report
all loans by race, and all regulatory institutions were required to
take these statistics into account in all regulatory decisions: The
implication of this law is that if you don't make enough loans to
protected minorities they will find you guilty of violating some
regulation.
James A. Donald
> As has been pointed out fairly often now, the
> likeliest culprit for the bad loans themselves was the
> them incentive to make as many loans as possible
If that was the problem, why did they not make bad loans
in white suburbs?
Coffee's For Closers
jam...@echeque.com says...
> "James A. Donald
> > > That the rating agencies rated crap securities AAAAA
> > > may well be because they are corrupt - but they are
> > > corrupt because the regulators *needed* them to be
> > > corrupt - because the officers of an honest rating
> > > agency would be facing lawsuits as racists.
> "Andy F."
> > Have you got any evidence of rating agencies being
> > corrupt
> We have ample evidence that rating agencies were corrupt
> - the only question is motive. Did the people being
> rated slip them some money, or did the government
> threaten them with accusations of racism.
>
> I have no direct evidence that the government threatened
> them, but observe that no one in government proposing to
> do anything about these flagrantly improper ratings -
> which suggests that the guilt lies with the regulators,
> rather than the regulated.
My vague understanding is that, there weren't any direct bribes.
But, rather, a more subtle threat. "If you give our securities
poor ratings, then we won't bother to apply for ratings from you
anymore." So each rating service wanted to keep receiving the
(paid) applications from the issuers.
--
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James A. Donald
> But, rather, a more subtle threat. "If you give our securities
> poor ratings, then we won't bother to apply for ratings from you
> anymore." So each rating service wanted to keep receiving the
> (paid) applications from the issuers.
But the ratings agencies did not rate *everyone* AAA. Why were some
people improperly rated AAA, and others properly given a lower rating.
James A. Donald
> The second one I looked at shows this ::
> Ethnicity Counts When It Comes To Higher-Priced Subprime Loans
>
> Those in the subprime category typically pay the highest rate because of
> the risks they pose; not only a risk that they won't pay on their obligation
> but that they will be **more likely to prepay their mortgages ahead of
> schedule*** once they have cleaned up their credit, build up equity or
> increased their income.
This is, of course, simply a lie. If it was true, then why are we
seeing foreclosures in minority areas and not in white areas.