Comments on: Race-based predatory lending fueled housing crisis

By: woody188

woody188 — Tue, 05 Oct 2010 00:16:36 +0000

They were giving out jumbo liar loans to migrant workers. I’m not sure who was taking advantage of who in those cases. But I did note back in 2006 that more African-Americans were getting option ARM’s versus other groups.

My one friend is Asian-American, her husband African-American, and I warned them not to do an ARM. They told me it was the only loan they were offered. I told them they should have shopped around with other lenders. Sigh…

There is a case where interest only loans can be of help. For instance, I have two houses, one I’d like to sell and I don’t care about building more equity in it. So I can refinance to an interest-only loan and make smaller payments until it finally sells. Having two mortgages is a pain in the rear.

By: Mightymo

Mightymo — Mon, 04 Oct 2010 22:19:46 +0000

I say that this is simply BS. This is an attempt to divert attention from the truth. Predatory lending on this scale didn’t simply just happen, it was promoted by creating an environment that favored it.
The banking industry, and a predominantly Republican group in government influenced by the banking industry fought for over 20 years to change banking rules created after the depression. The rules restricted the banking industry and prevented them from making money at the expense of the economy.
Clinton signed into law what the house and senate requested at the very end of his presidency in Nov 1999.
Bush, in mid 2001 made public his idea and intention of promoting home ownership as a part of the American dream, and as a means of promoting economic growth.
In mid 2002, Bush through HUD, and Fannie Mae and Freddie Mac, provided funds, tax incentives, and most importantly, changes in lending practices to drastically increase the amount of home purchases by African Americans and Hispanics in the US. This plan was expected to increase the HUD’s funding by 2.1 billion dollars.
These incentives, for both the banking industry and the mortgage industry were in my opinion, the cataylist for inept financing and the eventual economic collapse.
Strangely, I rarely ever hear anyone contribute bush’s obvious political push from the top down of the mortgage industry. I clearly remember the drastic increase of idiotic lending practices right after his 2001-2002 push for lending to minorities.
After owning my home for only a few years, I began to receive all sorts of crazy fliers in the mail for refinancing, along with dozens of visits to my front door by people eager to sign me up for refinancing.
One plan in particular that I thought was absolutely ridiculous and crazy was the interest only plan. Basically, you pay the interest only for the first 10 years, then begin to pay the principle. The benefit was supposedly more money up front to buy all the goofy things you always dreamt of.

By: Guardhouse Lawyer

Guardhouse Lawyer — Mon, 04 Oct 2010 16:22:22 +0000

Yes, that mean old Barney Frank. He held a gun to the heads of all these lenders and said, “Greed is good. You must make usurious loans and charge outrageous fees, otherwise bad things will happen to you.” None of those mortgage originators, brokers, processors, lenders., etc., would have engaged in these predatory practices if Barney and friends had not made them do so.

Sheesh.

By: Almandine

Almandine — Mon, 04 Oct 2010 13:20:45 +0000

Compliments of good ole Barney Frank.