Home Mortgage Disclosure Act data from 2005 reveal that more than 50 percent of black and 46 percent of Latino home buyers received subprime loans, compared to 17 percent of white borrowers. Many of the minority borrowers could have qualified for more favorable terms.
Exploiting the poor and minorities has always been a favored way for the capitalist class to increase their wealth.
Many of those with subprime loans will, of course, be losing their homes, maybe even to the same pond scum who sold and funded the mortgages, who are now waiting for prices to drop so they can buy cheap.
I agree that minorities will bear the brint of this fiasco. I disagree that it is racism. The subprime market takes advantage of the poor. The poor are disporportionately members of minority communities. So far, no argument. But did subprime lenders specifically target blacks and Mexicans? That’s a reach I can’t make. It’s the dynamics of the economic system, espcially one pinned to the existence of an underclass made up of desperate immigrants and others outside the mainstream of economic progress.
BTW, it’s likely that, as in 1990, the lenders are going to take these failing loans in the shorts. They’ll sell of the properties at a loss, take the tax writeoff, and move on (or go bankrupt). But someone does benefit: the upper- and middle-class real estate flippers and their real estate agents. Yes, the wealthy will continue to increase their wealth. But not the ultra-wealthy bankers this time. Just the run-of-the-mill better-off who already own one home and are looking for the next big break.
Racism doesn’t have to be deliberate or even conscious to be racism.
But yes, class is also an important part of it, a wealthy class exploiting the poor.
Schools in minority and poor areas frequently get less funding and help than schools in better-off Anglo areas. So this would be racism as well as class exploitation.
Do I think slimebag brokers and investment banks targeted the poor and minorities for loanshark mortgages, knowing their targets couldn’t fight back as easily as middle-class Anglos. Absolutely.
Many of those slimebag brokers are now (or will soon be) looking for employment. Of course, they’ll probably find it.
Sure it’s racism, now the Trailer Park Trash can buy the repos on subprime.
Ironically, cheap money policies that have trapped some many minority people in houses they can’t pay for were enacted as a response to complaints that to great a percentage of minorites were unable to qualify for traditional loans. Here in El Paso, Texas, which is 80 percent Hispanic, a survey revealed that, while more Hispanics than Anglos received mortgage loans, a larger percentage of Hispanics than Anglos failed to qualify for loans. Although the lenders were able to demonstrate the lending process was not racially biased (the loans applications were processed and approved by computers that had no way of identifying the race of applicants, civic leaders coerced the banking community into “leveling the playing field” by granting loans to a set percentage of Hispanics who otherwise would not have qualified.
The executives of mortgage companies that sprang up overnight to take advantage of the easy money policies could care less about race; they were motivated by generating short-term revenue growth and big bonuses. At the low end of the non-traditional mortgage pyramid, minorities represent an outside percentage of the loosers, at the high end or overly optimist buyers who bought mansions assuming they would raidly increase in value. In the middile are people of all races who are going to spend the rest of their lives paying high monthly payments on homes that are decreasing in value and can’t be sold for what is owed on them.
Isn’t strange that the same people who decry it as racism when banks give less loans to poor minorities are now saying it was racism that motivated people to lend money to the very same poor minorities? Further, there is no “easy money” made from people defaulting on their loans. It is horrible business for capital lenders. You might want to look into the dozens of lending organizations that folded in recent months.
Heck, I think the mortgage companies were exploiting and gouging everyone – but minorities got shafted even harder.
Yeah, with those rediculously high 5.5% interest rate loans that everyone willingly entered into without any kind of coercion were clearly evil. Of course it was not the responsibility of the people taking out loans several times the size of their annual income to do some research, ask questions, read their contracts or understand the loan and homebuying process.
Schools in poor areas often get much more funding and have higher paid teachers than rich neighborhoods. Public schools in general also pay very significant amounts more per pupil than private schools, while doing much, much worse.
Sure, lots of folks signed the dotted line for a mortgage without thinking much about it, without reading it, deluded into thinking the HELOC ATM gravy train would go on forever.
Many were aided by sleazy mortgage brokers, and the whole thing was a speculative bubble that just popped.
With lots of people, Black, White, middle class, poor, now getting badly hurt.
(But few, if any, ARM rates were 5.5%. maybe a low teaser, then 10%.)
Can you provide an updated link for the source for the quote in the original post? It doesn’t work now