She’s right – Elizabeth Warren: minorities were targeted for sub-prime loans

View from the left

View from the left

Of course, while our sole American Indian senator regrets the result, she failed to mention that the targeting was done on purpose, at the directive of the federal government.

The supposed “targeting” minority applicants who received low-interest loans in order to increase access to housing was not merely a bug but a feature of the administration of the 1977 Community Reinvestment Act (CRA).

“In the 1990′s under the administration of Franklin Raines, a Clinton Administration appointee, Fannie Mae began to demand that the lending institutions that it dealt with prove that they were not redlining,” read an analysis via San Jose University economics professor Thayer Watkins. “This meant that the lending institutions would have to fulfill a quota of minority mortgage lending.”

New York Times report in 1999 celebrated the extension of low-interest loans to minority applicants, which had exploded under President Bill Clinton.

“Home ownership has, in fact, exploded among minorities during the economic boom of the 1990′s. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University’s Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.

In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent.”

Noah Rothman, the author of the Hot Air article I’m quoting, observes, “This is only one aspect of the debate on the nature of government intrusion into the housing market with effects that so often negatively impact minorities that few on either side of the political aisle really want to have. Racially poisonous outcomes arising from public policy surrounding socially progressive lending to minority home loan applicants is as old as the New Deal.”


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8 responses to “She’s right – Elizabeth Warren: minorities were targeted for sub-prime loans

  1. Stacked deck in FED HUDEPADOTTSAetc….
    Remember Lenin provided heat and housing in St. Petersburg…..for all….who paid?

  2. Gee, the government created the CRA to make more loans to lower-income, weaker-credit, sub-prime borrowers. Now is Harvard liberal Elizabeth Warren SHOCKED that these loans to sub-prime borrowers are sub-prime loans?

    Only a liberal would be so stunned by reality…..

  3. burningmadolf

    This on a day when Fannie and Freddie roll out yet another craptastic idea like the 3% idea that came out today. Shocking!

  4. anon2

    I know a lot of otherwise smart white folks who fell prey to the concept of what they thought was free money until the payback of principal happened ten years later.

  5. johnnybowhunter

    Good ole Barney Frank…
    Where it got interesting was in the states w/nonrecourse loans..

  6. Well informed folks who know the truth blame it all on Barney Frank. He should be censured for letting it happen.

  7. Publius

    It was actually a conspiracy led by Goldman Sachs. They had first year associates go around to low income neighborhoods in buses and physically wrestle anyone in the neighborhood onto the bus where they were restrained and driven the nearest Wells Fargo, BofA or JP Morgan branch. At the branch they were water boarded into taking out a no money down liar loan to buy an over valued property, sight unseen, the appraisal of which was done by one of the bank’s subsidiary’s that received kick backs to inflate the value from the mortgage underwriting unit of said bank. The borrowers were instructed not to pay their loans back but to make sure that they paid the cable and phone bills and the auto loan.

    These loans were then sold by the banks to Goldman Sachs, who packaged the loans into securities and bribed the major NRSRO’s (Moody’s and S&P) to give them AAA ratings. Bribes including bags of cash deposited into analysts freezers at home, liquor and lap dances at various gentleman’s clubs were documented by the aforementioned first year associates in excel spreadsheets and were approved by the operating committee monthly (“God’s work”). Goldman then in turn sold these securities to sophisticated buyers including Icelandic pension funds at incredibly huge mark ups. The huge amounts of money that they made was distributed freely to employees (except the first year associates; “there lucky to be working here!”) who in turn donating heavily to those government do gooders who believed the there should be a chicken in every pot in a chef’s kitchen with granite and stainless steel in a house whose value could only go up because there was never a housing crash in this country because we had no housing data during the Great Depression when the housing market crashed………

  8. Anonymous Citizenette

    So….. let me see if I got this right. Dems/lefties demand that banks lend to unqualified borrowers, but then cry foul when these borrowers are handed loans that they can’t possibly pay? Didn’t we go through this already? Let’s all be honest here – nothing short of handing every shitbird in the country the keys to a house and then having taxpayers pay all expenses for said house is going to be acceptable.