When it says "even when their incomes should have qualified them for market rates," it's not saying anything about their credit histories or ratings. Why?


That "power to change" is from the charge of racisim.


Kramer

__________________
“It's time to admit that public education operates like a planned economy, a bureaucratic system in which everybody's role is spelled out in advance and there are few incentives for innovation and productivity. It's no surprise that our school system doesn't improve; it more resembles the communist economy than our own market economy."
Albert Shanker, former president of the American Federation of Teachers

The poor are NOT responsible for this mess. I blame part of this mess on the party that created the CRA that pressures banks to make loans to people who can't afford standard loans and/or who have bad credit. Another part of this mess belongs to predatory lending. Republicans and Wall Street are also to blame.

In the same fashion, the coming debt from medicare alone is going to be more than the entire net worth of the US including every single item of worth in it. Yet I don't blame old people for this other coming economic mess. I blame democrats because they created this program.

Kramer

__________________
“It's time to admit that public education operates like a planned economy, a bureaucratic system in which everybody's role is spelled out in advance and there are few incentives for innovation and productivity. It's no surprise that our school system doesn't improve; it more resembles the communist economy than our own market economy."
Albert Shanker, former president of the American Federation of Teachers

ahoy sir Kramer (go giants, rawr!)


the bolded part was added by me, fer emphasis, aye.

again, an extract from the Charlotte Observer, Sept 16th 2008.

Kramer, thar was a long series 'o articles on these practices in the Charlotte Observer. later tonight, after i come back ondeck, i'll do me best to look'm up fer clarification on yer questions.

as the eloquent Andrewl, the mighty polar bear noted, i think CRA came about because some of them banks out thar were refusin' folks mortgages based on the color 'o their skin. in short, discriminatory practices were takin' place.

the article in the Observer tends to lead credence to the idear that if you aren't a white colored person, lendin' practices aren't always exactly fair and balanced.

i added the final bit that i found in the Cleveland Plain Dealer, to shed some light on the motivation fer the sellin' of subprime loans. it wasn't altruism, and it wasn't to protect the lenders from charges 'o racism. it was the search fer profits (which, at least in principle, i got no issues with).

-Meadhallpirate

Actually, if the results of the Observer's investigation follow the results of all other studies done on this issue, whites are also discriminated against.

In 1991, a nationwide study of mortgage lending statistics was published by the FRB. The study had no data on the applicants' net worth, credit history, employment history, debt load, or other criteria normally checked when making loans.

The FRB did another study the following year. Simliar study with similar results. Note the CRA had been on the books for 13 years already.

The race pimps (like Jesse Jackson and Al Sharpton) immediately jumped on the results: that blacks and hispanics were denied loans more often than whites. Jesse called it "criminal activity." What he didn't want to point out was that whites were denied loans more often than Asian Americans.

So, apparently, being white doesn't protect one from being discriminated against.

Some of the information left out of the studies:
The average white household had about 4x the amount of liquid assets as the average black household.
Black and Hispanic applicants also tend to have poorer credit histories than whites.
Blacks and Hispanics are much more likely than whites to be purchasing a two- or four-family home. Whites are more likely to be denied loans when trying to apply for these homes, indicating lenders perceive more risk there.

These differences, and the others left out in the previous studies, were explored in another FRB study in Boston.

Interestingly, in this study once all differences were taken into account blacks were still denied loans 17% of the time when they should have been denied only 11% of the time. So, there was some discrimination. The data was reviewed by specific bank to see if there was some trend there. Guess what they found? All of the discrepancy could be explained by one bank. Guess who owned that bank? Blacks. Black bank owners were discriminating against black borrowers.

When this new little wrinkle showed up, Forbes interviewed the principal author of the 1992 Boston study and asked a very simple question: Did you ever check the default rates of blacks and whites? The answer: No.

Well, if the default rates of blacks and whites are virtually the same, wouldn't that mean the lenders are making rational decisions, rather than racist decisions? The answer: Yes, but I do believe there is discrimination. But you have no proof? No, no one does.

This argument that people of some other color than white are being discriminated against unfairly not only lacks any evidence, it fails on its face. To accept that argument, and its attendent argument that lenders are not only racist but greedy as well, we would have to simultaneously accept that lenders are so greedy they want to make money, but not greedy enough to stoop so low as to accept money from people other than whites. Even in the Jim Crow South whites were more than willing to accept money from blacks. If the risks are the same, and the likelihood of being paid equal, why wouldn't lenders loan money to blacks? Because they're greedy, but not greedy?

This is not the first time we've seen subprime lending shit the bed. We really seem to have a short memory because BofA had to shut down its subprime lending operation in 2001 after losing hundreds of millions of dollars. Many subprime lenders have gone bankrupt long before this round. They were pressured to provide loans - to not appear to be engaging in "criminal activity," as Jesse says - and paid the price. Now, with so many of them defaulting, and FRE and FNM backing these loans, we get to pay the tab for political correctness based upon faulty studies.

Yippee.

*hops back ondeck and salutes Cato*

with all due respect me friend, i keep finding that this position, however heartfelt, is not totally accurate.

i do have proof. i again refer you to the Charlotte Observer, mate. the only reason imma quotin' this newspaper is i moved down here a few years ago, and remember this bein' front page news at the time.

*shrugs*

i don't have a dog in this fight, mate...though i have been followin' the grim tale of all these banks bein' sunk, because it be tangentially related to me own business.

imma also not arguein' that black american folk don't have wealth or credit problems that preclude them from gettin' favorable loan terms, imma just pointing out that discrimatory lending practices do exist.

the subprime loans were, by and large, a vehicle fer wall street to make lots and lots of monies....and yes, they allowed folks who shouldn't have gotten loans fer their homes to get'm.

from me own personal experience (i have friends who work in the mortgage / lending business at Bofa and Wachovia, the two pillars of charlotte), i don't know anyone who extended a loan to a black sailor because they felt threatened with litigation from Al Sharpton, or anythin' of the sort.

and....yarrrr....on a final note (fer me at least), the biggest difference between the stupid rich and the stupid poor be this;

the stupid rich man has a greater potential to inflict sufferin' on the rest 'o us than the stupid poor man.

yarrrr!

-MeadHallPirate

*Cato returns same*
I understand your proof, MHP. But where is this study? Can we look at the data, the methods of collection, the criteria upon which the conclusion is based? Surely, if some swabby told you all the lasses in yonder establishment were right bonny, and he ought to know since his brother told him he saw one comin' outter' the door only last month, you'd question the validity of his conclusion?

As I pointed out, the studies we do have access to point to, at best, a very slight bias - and one held by members of the aggrieved race. Moreover, if it's a race issue, then clearly Asian Americans hold the Cat Bird's seat. Not whites, as many would like to believe.
Think of how much more money they could've made had the borrowers not defaulted. Let's use an example: Two men want a loan, a black man and a white man. They are equal in every respect. You want me to believe the black man won't get a loan based simply upon his color. In order to believe that I would also have to believe the lender did not want to earn the money from a loan that would, by every metric, be repaid. I would have to believe the lender would spite himself just because he didn't like the color of a man's skin. That simply doesn't make any sense.

There must be something more to the story. The "more" to the story is that the two men in our hypothetical are not equal in every respect. There is something else stopping the lender from earning money he very much wants to earn. Given that whites are approved for fewer loans than Asian Americans, should I claim discrimination as a member of the former race?

The CRA, FRE, FNM, and subprime loans have one purpose - as even Barney Frank admits: to provide loans to people who would otherwise not qualify for loans. People already identified as too risky for prudent lenders. These people got loans, they defaulted at a higher rate than conventional loans, and other people lost money. Since FNM and FRE are backed by the full faith and credit of the US, it's our money Congress feels free to play fast and loose with.
That's because this battle was fought back in the 30s (with FNM and FRE) and in the 70s with CRA. After the studies I mentioned in my last post, Clinton pushed a revision of the CRA so he could be seen to be doing something about the perceived, but wholly unsubstantiated, belief that minorities were being discriminated against. W did the same thing in 2003. But imagine if we didn't have these institutions? All it would take is another study like the flawed studies of '91 and '92 to "prove" lenders were discriminating. No bank in its right mind would risk its own money on subprime loans. But, for whatever reason, those applying for subprime loans are largely minorities. Since they won't be getting loans, cries of racism will fly, and Jesse and Al will be on the front page of every paper in the country - including the Charlotte Observer.
I'm not so sure of that. First because we already pay a lot for the stupid decisions of the poor. The vast majority of our budget is dedicated to them. Secondly, and related to the first, the suffering inflicted is dependent upon the degree which we wish to assume the consequences of those bad decisions.

As a side note, I must say I've always loved your approach to debate, MHP. Very entertaining, and proof positive that what we do and say here needs to be approached with as much seriousness as a discussion between very good friends.

yarrrr!

They loaned money they didn't have to people who would never pay it back and used that security to purchase more debt to finance other things (businesses) and to create massive instiutions based on much of nothing. They took their cut and a lot of people got very, very rich. The poor were kinda, just there in the middle with a house, they probably should have been able to afford anyway if the market were left to its own devices.

Its actually a private company which the govt sponsors and thus gets certain advantages over the competition, which means there isnt any. SS is run by the govt. FRE and NM are now. But I dont disagree with your OP, that there is a double standard.

__________________
http://www.fairtax.org

Elminate all taxes on income and replace with a national sales tax.

Yea, the poor were taken advantage of because someone loaned them money. Got it.

ARRR, and right ye be! Shoulda left that bit in, as 'twere the most damming part! Like I shows below, 'taint just how much plunder yer, uh, plunderin', but how much booty ye got and if yer overall seaworthy. Sounds to me like the skallywags were showin' ye half the map to trick ye into walkin' their plank!


( Sorry I wrote this bottom part first, but couldn't resist adding the above, partly in honorrr of International Talk Like a Pirate Day! Arrrr! )

As Cato implies, there are too many studies that are either done poorly or done with an end conclusion in mind.

A personal snapshot I'm familiar with: Borrower A is a single mother, 2 kids, her W-2 shows 35K. Borrower B is a married male, no kids, W-2 shows 80K. Which is the better risk for a 200K mortgage? It's obviously B, right? So if B gets a higher interest rate, it must be because he's a minority! Wrong. A has $400K in the bank, 60K in existing equity, a 10-yr employment history in a job known for its stability, and SS survivor benefits that essentially pay all the kids' expenses. B is going thru a potentially messy divorce, which is contributing to his short-lived company going down the tubes, and less than half as much in either equity or liquid assets.

There is a lot more to look at than just income - unless you either know the researcher and can vouch for their competence and objectivity, or are familiar with (or at least have access to) the study's methodology and/or source data, any study whose presentation emphasizes politicially significant findings should be quite suspect.

__________________
Today's forecast: Government corruption.

Tomorrow's forecast: 100% chance of more 'politics as usual'

Maybe it's finally time to vote Libertarian

I hear you loud and clear and agree with most of what you said. Except I work with the truly poor and trust me, they do not have Escalades, big screens TV, or even cable. I have clients who live in dingy apartments with old furniture with holes in them or just lawn furntiture or possibly no furniture at all. Most of them no not have cars and rely on public transportation or their feet to get from point A to B.
Now with that being said, I was watching the news yesterday and they had a middle class women on the TV wearing desinger clothes complaining about how her house was being foreclosed on. This was a very nice, upscale looking house, and all I could think of was "who told you that you deserved a house like that?" and then I remember an old Frannie Mae or Freddie Mac commercial that advertised that everyone could own a house, "just drop in to one of our educational seminars and will show you how". They preyed on the stupid and greedy. So many people these days think they deserve a big screen tv, a big nice house, nice furniture, and a nice car before they even earned it! I feel no sympathy what so ever for these people.

Tell us about these poor. Why are they poor?

__________________
http://www.fairtax.org

Elminate all taxes on income and replace with a national sales tax.

I'm certainly not arguing that all poor live the pimp lifestyle. I am arguing most indulge in life's luxuries and neglect life's necessities, your personal experience notwithstanding. Here's my proof:

"Forty-six percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.
Seventy-six percent of poor households have air conditioning. By contrast, 30 years ago, only 36 percent of the entire U.S. population enjoyed air conditioning.
Only 6 percent of poor households are overcrowded. More than two-thirds have more than two rooms per person.
The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)
Nearly three-quarters of poor households own a car; 30 percent own two or more cars.
Ninety-seven percent of poor households have a color television; over half own two or more color televisions.
Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.
Seventy-three percent own microwave ovens, more than half have a stereo, and a third have an automatic dishwasher....

Poor children actually consume more meat than do higher-income children and have average protein intakes 100 percent above recommended levels. Most poor children today are, in fact, supernourished and grow up to be, on average, one inch taller and 10 pounds heavier that the GIs who stormed the beaches of Normandy in World War II....

Overall, the typical American defined as poor by the government has a car, air conditioning, a refrigerator, a stove, a clothes washer and dryer, and a microwave. He has two color televisions, cable or satellite TV reception, a VCR or DVD player, and a stereo. He is able to obtain medical care. His home is in good repair and is not overcrowded. By his own report, his family is not hungry and he had sufficient funds in the past year to meet his family's essential needs."