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2008-12-04 Home Front Economy

Civil rights complaint targets Wall Street rating firms

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Posted by tipper 2008-12-04 08:58|| || Front Page|| [3 views ] Top

#1 Amazing. That's like a homeless guy suing somebody who gave them spare change, which they used to buy alcohol and drugs and get into trouble.

Posted by Anonymoose 2008-12-04 09:46|| 2008-12-04 09:46|| Front Page Top

#2 The only answer is a very unpalatable one indeed. Go back to the way we used to buy houses. House price of 3 years salary if you are smart, 4 years if you are a retard. Minimum credit score of 780 with 20% down, no if's and's or but's, and if you don't have it you can hit the road. Anything other than that will put us right back into the same mess.
It's not a glamorous solution, but its what we need to do.

Posted by bigjim-ky 2008-12-04 10:53|| 2008-12-04 10:53|| Front Page Top

#3 Umm, didn't Barak Obama sue one of the big banks to force them to give these loans to minorities?

Posted by Deacon Blues">Deacon Blues 2008-12-04 11:54|| 2008-12-04 11:54|| Front Page Top

#4 In what is apparently the first legal action of its kind, an association of community-based organiz~~ations~~ ..ers

Dog, hand, action, feeding piece..... Bite feeding hand, get some of the action.

Posted by Besoeker 2008-12-04 12:59|| 2008-12-04 12:59|| Front Page Top

#5 The roots of this crisis go back to the Carter administration. That was when government officials, egged on by left-wing activists, began accusing mortgage lenders of racism and "redlining" because urban blacks were being denied mortgages at a higher rate than suburban whites.

The pressure to make more loans to minorities (read: to borrowers with weak credit histories) became relentless. Congress passed the Community Reinvestment Act, empowering regulators to punish banks that failed to "meet the credit needs" of "low-income, minority, and distressed neighborhoods." Lenders responded by loosening their underwriting standards and making increasingly shoddy loans. The two government-chartered mortgage finance firms, Fannie Mae and Freddie Mac, encouraged this "subprime" lending by authorizing ever more "flexible" criteria by which high-risk borrowers could be qualified for home loans, and then buying up the questionable mortgages that ensued.

All this was justified as a means of increasing homeownership among minorities and the poor. Affirmative-action policies trumped sound business practices. A manual issued by the Federal Reserve Bank of Boston advised mortgage lenders to disregard financial common sense. "Lack of credit history should not be seen as a negative factor," the Fed's guidelines instructed. Lenders were directed to accept welfare payments and unemployment benefits as "valid income sources" to qualify for a mortgage. Failure to comply could mean a lawsuit.

As long as housing prices kept rising, the illusion that all this was good public policy could be sustained. But it didn't take a financial whiz to recognize that a day of reckoning would come. "What does it mean when Boston banks start making many more loans to minorities?" I asked in this space in 1995. "Most likely, that they are knowingly approving risky loans in order to get the feds and the activists off their backs . . . When the coming wave of foreclosures rolls through the inner city, which of today's self-congratulating bankers, politicians, and regulators plans to take the credit?"

Posted by tu3031 2008-12-04 13:40|| 2008-12-04 13:40|| Front Page Top

#6 Go back to the way we used to buy houses. If we do that, no houses over $20,000 will be sold for the next decade or two.

Posted by Anguper Hupomosing9418 2008-12-04 17:35|| 2008-12-04 17:35|| Front Page Top

#7 AH9418,

Would that be such a bad thing? At least the people who did buy houses would be able to pay for them, as opposed to asking me to do it for them.

From what I can see so far, the average American who ISN'T in over his head should be mad as Hell about the bailouts. First, his currency is going to be debased even further than it already has been. Second, his taxes are going to rise to help people who deliberately took extremely ill-advised and obviously unsustainable financial risks. In short, the people who were prudent and cautious will end up paying for the extravagantly cavalier gamblers.

As one of the cautious and prudent, I'm EXTREMELY unhappy with this situation.

Posted by Jolutch Mussolini7800 2008-12-04 18:24|| 2008-12-04 18:24|| Front Page Top

#8 Are these guys Muslims?

Posted by Nimble Spemble 2008-12-04 18:44|| 2008-12-04 18:44|| Front Page Top

#9 "the average American who ISN'T in over his head should be mad as Hell about the bailouts"

I sure as hell am, JM. >:-(

Posted by Barbara Skolaut">Barbara Skolaut 2008-12-04 19:19|| http://ariellestjohndesigns.com/]">[http://ariellestjohndesigns.com/] 2008-12-04 19:19|| Front Page Top

#10 MAD AS HELL ? YES! I've lost it in my 401K (oh well, a chance you take). But!!! I'll also be paying Paulsontaxes for everybody elses mortgage mistakes until I'm 129 years old!

Posted by Besoeker 2008-12-04 19:31|| 2008-12-04 19:31|| Front Page Top

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