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Mortgage Crisis and Racism: It's Worse than You Thought

chicago dyke's picture

This doesn't surprise me at all, indeed, I would name it a "feature" and not a "bug." Democracy Now!

A startling new report has predicted the subprime mortgage crisis will cause people of color to lose up to $213 billion, leading to the greatest loss of wealth in modern U.S. history. The figure appears in a new report from United for a Fair Economy called “Foreclosed: The State of the Dream 2008.” The group accuses mortgage lenders of deliberately targeting the poor and people of color with high-cost loans.

Predatory lending is as old as 40 Acres and a Mule. Poor people are the easiest to scam when it comes to complex financial vehicles, and I would like more bloggers to speak about this angle of "how we got this crisis."

It's pretty clear that greed, willful ignorance, Bushist "logic" and a criminal lack of regulation brought about the mortgage crisis. But so too did racism- again and again I've read of poor and brown and black people conned into believing they could afford mortgages when they couldn't. Now this report confirms this endemic of racist lending practices. Want to impress me, Obama, Hillary? Speak about this angle of the mess one of you will be cleaning up soon.

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In the Asian Times,

big time financier Henry Liu points the finger at US economic policies that make cruel demands on those least able to afford them, the Chinese worker.

Closer to home, and more to the point of your original post is this, (cut and pasted from page 3)

"The city of Baltimore is filing suit against Wells Fargo, alleging the bank intentionally sold high-interest mortgages more to blacks than to whites - a violation of federal law. Cleveland is filing suit against investment banks such as Deutsche Bank, Goldman Sachs, Merrill Lynch and Wells Fargo for creating a public nuisance by irresponsibly buying and selling high-interest home loans, resulting in widespread defaults that have depleted the cities’ tax base and left entire neighborhoods in ruins. The cities hope to recover hundreds of millions of dollars in damages, including lost taxes from devalued property and money spent demolishing and boarding up thousands of abandoned houses.

"To me, this is no different than organized crime or drugs," Cleveland Mayor Frank Jackson said in an interview with local media. "It has the same effect as drug activity in neighborhoods. It's a form of organized crime that happens to be legal in many respects."

The Baltimore and Cleveland efforts are believed to be the first attempts by major cities to recover social costs and public financial losses from the foreclosure epidemic, which has particularly plagued cities with significant low-income neighborhoods. Cleveland’s suit is more unique because the city is basing its complaints on a state law that relates to public nuisances. The suit also is far more wide-reaching than Baltimore’s in that instead of targeting the mortgage brokers, it targets the investment banking side of the industry, which feeds off the securitization of mortgages."

chicago dyke's picture
Submitted by chicago dyke on

sorry, my arms are really tired and i've been working with wood all day, so you'll have to search my posts yourself. but i touched on that angle, the theft of real wealth from the chinese worker, some time ago.

to me the bigger lesson is: "globalization" = an international scam to keep poor people without opportunity, while their nations' natural resources are extracted and sold to the benefit of a few (usually foreigners). it's happening here now, re our financial markets and national debt.

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Now this report confirms this endemic of racist lending practices

You're a tired puppy, no doubt... I assume "epidemic" or "pandemic" ... or perhaps "enema" ???

chicago dyke's picture
Submitted by chicago dyke on

endemic |en?demik| adjective 1 (of a disease or condition) regularly found among particular people or in a certain area : areas where malaria is endemic | complacency is endemic in industry today. See note at epidemic . • [ attrib. ] denoting an area in which a particular disease is regularly found. 2 (of a plant or animal) native or restricted to a certain country or area : a marsupial endemic to northeastern Australia.

i used that word exactly how i meant it.

jayr's picture
Submitted by jayr on

Not to blame people for signing these loans but considering how easily people fall into credit card debt you would think that they may think twice about what they are signing and how much of a home they can afford. I know there are cases of papers being doctored etc to get the loans through so that said everyone i think is at fault