In 1994 Barack Obama represented Calvin Roberson and ACORN in a lawsuit against Citibank, charging the bank systematically denied mortgages to African-American applicants. Obama worked against banks who denied mortgage loans to minorities.
The case against Citibank was settled out of court. This lawsuit was one of a series of lawsuits that were filed by ACORN using “redlining and racism” allegations to lower credit standards.
In 2007 Barack Obama actually said that, “Giving sub-prime loans to people who can’t afford them is a good idea.”
Of course, giving sub-prime loans to people who can’t afford them caused the current economic crisis.
Which brings us to today…
Even the state-run media is now reporting that lending to racially segregated minority neighborhoods led to the current financial crisis… Except the state-run media wants you to believe that it was predatory and racist lending practices that were the cause of the problem.
Reuters reported this:
Predatory lending aimed at racially segregated minority neighborhoods led to mass foreclosures that fueled the U.S. housing crisis, according to a new study published in the American Sociological Review.
Predatory lending typically refers to loans that carry unreasonable fees, interest rates and payment requirements.
Poorer minority areas became a focus of these practices in the 1990s with the growth of mortgage-backed securities, which enabled lenders to pool low- and high-risk loans to sell on the secondary market, Professor Douglas Massey of the Woodrow Wilson School of Public and International Affairs at Princeton University and PhD candidate Jacob Rugh, said in their study.
The financial institutions likely to be found in minority areas tended to be predatory — pawn shops, payday lenders and check cashing services that “charge high fees and usurious rates of interest,” they said in the study.
“By definition, segregation creates minority dominant neighborhoods, which, given the legacy of redlining and institutional discrimination, continue to be underserved by mainstream financial institutions,” the study says.
Redlining is the practice of denying or increasing the cost of services, such as banking and insurance, to residents in specific areas, often based on race.
The U.S. economy is still struggling with the effects of its longest recession since the 1930s, which was triggered in large part by the housing crisis, which was in part triggered by the crash of the subprime loan market.
Subprime lending refers to loans made to consumers with poor credit and others considered higher risk. They tend to have a higher interest rate than traditional loans.
The study, which used data from the 100 largest U.S. metropolitan areas, found that living in a predominantly African-American area, and to a lesser extent Hispanic area, were “powerful predictors of foreclosures” in the nation.
Even African-Americans with similar credit profiles and down-payment ratios to white borrowers were more likely to receive subprime loans, according to the study.
“As a result, from 1993 to 2000, the share of subprime mortgages going to households in minority neighborhoods rose from 2 to 18 percent,” Massey and Rugh said.
The article was a bit off. It wasn’t racism that caused the banks to loan to minorities. And, it wasn’t George Bush.
It was liberal policy.
Regardless, it all leads back to Barack Obama.
What a shock.
