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Sen. Warren: Subprime mortgage crisis targeted minority families

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Mortgage Professional America | 10 Dec 2014, 06:22 AM Agree 0
Could the outspoken lawmaker could be right? According to studies from HUD and The Urban Institute, she may be.
  • KC | | 10 Dec 2014, 09:44 AM Agree 0
    This is a mind boggling article. The headline makes it as if minorities were taken advantage of during the housing bubble, instead of the obvious truth that lending standards were loosened to allow more people to qualify to purchase a home. Then the article states that minority borrowers are now being discriminated against because current lending standards are too tight?
  • DW | | 10 Dec 2014, 10:15 AM Agree 0
    Taken at face value one might think targeting occurred. However as you review the data on a more granular level it is clear that these mortgages went to people of all races based on their credit profile. Lower scores are traditionally due to a mismanagement of credit. Why should someone who doesn't pay their bills be able to get the same rate as the individual who pays as required? isn't that called accountability? It is a privilege not a right to own a home...somehow that has been forgotten. A perfect analogy is car insurance. The driver who has no tickets or accidents will pay a lower rate than the driver who has multiple violations and accidents. It is all about risk management. That is why HMDA data when reviewed on the surface is misleading and people who lean a little more to the left take advantage of it and sensationalize it for personal gain.
  • Nick | | 10 Dec 2014, 10:53 AM Agree 0
    There is some truth to what Sen. Warren is claiming. But the fact of the matter is that it was the minorities took advantage of each other, for the most part. As a wholesale AE in the Los Angeles area leading up to the market crash I saw it happen. Many of my brokers would take advantage of people of their own race or ethnicity--meaning the broker offices that were operated by people of Mexican decent took advantage of Mexican clients. The same was true of black brokers and Asian brokers. People too often put more trust in the people of their own race or ethnicity, and the minority broker knew that and took advantage of it.
  • Viva la Revolucion | | 10 Dec 2014, 12:15 PM Agree 0
    Just some more dimwitted class warfare from someone steeped her whole career in political correctness nonsense.
  • Wm Matz | | 10 Dec 2014, 12:37 PM Agree 0
    The article takes some undisputed facts but draws some questionable conclusions. E.g., the CRA had very little effect on mortgage lending. I remember B of A offering a whopping 1/4 point off fees for mortgages in targeted census tracts. Why bother?

    On the other hand, greed played a huge role. Once Wall St. discovered it could mislead investors about the safety of the subprime and pay option ARM securities, there were huge profits to be made.

    Remember the big scandal about racial discrimination in mortgages in the early 90's? The initial report on HMDA data showed apparent discrimination. But later reports that controlled for credit scores, incomes, etc. found that denials rates were roughly equivalent.

    There is no question that minorities are affected INDIRECTLY in mortgages by past discrimination in housing, employment, etc. Those led to patterns of lower incomes and credit, which affect mortgage qualification. But there seems to be only isolated incidences of direct mortgage discrimination.
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