The Subprime Mortgage Loan Crisis has contributed significantly to the Economic Collapse in the United States.
Concerning a lack of regulation by the Fed (that many believe led to this crisis):
From CBS in 2010,
Greenspan: Subprime Mess Not Fed's Fault
[Quote] Alan Greenspan defended his tenure Wednesday as head of the Federal Reserve before a panel investigating the roots of the financial crisis. As he has in the past, Greenspan disputed critics who say he kept interest rates too low for too long, encouraging risky lending.
Greenspan also hit back against criticism that his Fed failed to regulate high-risk loans to borrowers who couldn't afford the debt. Many of those loans became the toxic assets that sparked the crisis.
Testifying to the Financial Crisis Inquiry Commission, Greenspan insisted the Fed lacked authority to regulate the nonbank lenders that issued most subprime mortgages.
But Phil Angelides, the panel chairman, referred to internal Fed documents in which staffers had recommended "broad prohibitions on deceptive lending." Angelides said the Fed had issued guidance on predatory lending but had failed to regulate it.
"Why, in the face of all that, did you not act to contain abusive, deceptive subprime lending?" Angelides, a former California state treasurer, asked Greenspan.
Greenspan pointed to a series of actions he said the Fed took. Angelides countered that the Fed's actions covered only 1 percent of the subprime lending market.
"You could've, you should've and you didn't" regulate the lending activities, he said. [/Quote]
Retrieved 5/8/10, from
http://www.cbsnews.com/stories/2010/04/07/business/main6371410.shtml
Concerning targeting minorities with subprime loans (please note that there a few internet articles stating the contrary, however, predatory lending by definition implies that lenders are biased and pursue prey which is not equality in lending):
From CNN in 2002,
Subprime lenders target minorities
[Quote] African-Americans and Hispanics are disproportionately represented in the subprime home refinance market. And the racial disparity between whites and minorities actually increases as incomes rise.
Those were among the key findings of a study released Wednesday by the Center for Community Change, a non-profit consumer advocacy group.
The study, entitled "Risk or Race?," revealed that lower-income African-Americans receive 2.4 times as many subprime loans as lower-income whites, while upper-income African-Americans receive 3 times as many subprime loans as do whites with comparable incomes.
At the same time, lower-income Hispanics receive 1.4 times as many subprime loans as do lower-income whites, while upper-income Hispanics receive 2.2 times as many. [/Quote]
Retrieved 5/8/10, from http://money.cnn.com/2002/05/01/pf/banking/subprime/
From Reuters in 2008,
Bad Lenders Still Targeting Minorities
[Quote] More than 2 million subprime borrowers face higher mortgage costs and the possible loss of their homes if they cannot meet the payments. Studies have found that blacks and Hispanics were likely to be charged higher interest rates on subprime loans than whites with similar credit ratings. [/Quote]
Retrieved 5/8/10, from http://www.reuters.com/article/idUSN1130105420080211
From MSNBC in 2010,
NAACP drops Wells Fargo subprime lawsuit
(That is, they drop the lawsuit after Wells Fargo agrees to their demand!)
[Quote] CHARLOTTE, N.C. - The NAACP is ending its lawsuit against Wells Fargo that alleged the bank was forcing blacks into subprime mortgages while whites with identical qualifications got lower rates.
The lawsuit, filed over a year ago, is among more than a dozen the National Association for the Advancement of Colored People has filed since 2007 against large financial institutions.
As part of an agreement, San Francisco-based Wells Fargo will allow the NAACP to review its lending practices. The NAACP did not seek monetary damages in its suit, but said it sought to change behavior in the mortgage-lending industry.
NAACP President Benjamin Todd Jealous said Wells Fargo pledged to follow the group's principles on fairness and lending, which "ensure all borrowers get the highest quality credit vehicle appropriate for their circumstances and that guard against racial discrimination in lending."
Subprime mortgages, or loans given to customers with spotty credit history, helped fuel a collapse in the housing market in late 2007. [/Quote]
Retrieved 5/8/10, from http://www.msnbc.msn.com/id/36275355/ns/business-mortgage_mess/
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Who's really to blame for the sub-prime mortgage crisis?by RiverCityBank533 views
I am not saying that this information is false, because it isn't. However, there are some facts missing.
ACORN's campaign to pressure banks into giving minorities the same "opportunity" as the people who are qualified to get loans.
Obama SUING Citibank for discrimination.
The economic growth of Saudi Arabia, India, and China after the year 2000 (which doubled global investing).
The lower interest rate of federal securities which discouraged banks for buy them; leading them to mortgages instead.
EmperorProzen 8 months ago