Personally, I am using the affirmative action outside the normal rules (and using it as people that can't afford traditional mortgages) as there were many people other than minorities that this has had an effect on. I know I can't get a 30 year fixed right now but could easily get an ARM and by now a reposessed house. I was smart enough to say no.Is this financial crisis the result of affirmative action in lending?
If that were the case, the majority of people being foreclosed on would be minorities but that is not the case. Please prove me wrong by showing some statistics to the contrary.
This crisis is the result of complicated wrangling by everyone from the top executives at the lending establishments to the loan officers working on commission - plain old greed. Clinton and Carter pushed to make home ownership a reality for working families - for this generation to have access to the same American dream that their generation had access to. Affordable housing doesn't mean that you sell a $400,000 home to a person who only make 50K per year.
Your arguments make it seem as though there aren't whites out there who are struggling too. Who are trying to purchase homes in which to raise their families on limited income. As such, don't complain about everything that minorities allegedly get. Apparently, no white person anywhere in the country has any problem making ends meet and not a one of them needs someone to be an advocate for them. Apparently, you're all rich and happy.Is this financial crisis the result of affirmative action in lending?wow you're missing 1982 until 1990 hmmm who was president during that time? Sorry Charlie you can't blame Clinton and Carter also had little to do with it as well.
So who was it then you ask. Well lets take a closer look at who really started this mess shall we
Legislative deregulation of the banking industry has fueled the subprime lending industry. In 1980, Congress adopted the Depository Institutions Deregulation and Monetary Control Act (“DIDMCA”). DIDMCA helped the Savings and Loan industry stay competitive with nonfederally chartered banks where consumers received higher rates of return . DIDMCA also enabled the S%26amp;Ls to recoup the higher interest rates they were paying by allowing them to preempt state usury laws for loans to consumers secured by first liens on their homes
Under president Reagan (oh thats right I knew I missed someone) in 1982, deregulation continued with the passage of the Alternative Mortgage Transaction Parity Act which extended federal mortgage-lending regulations to most residential loans, including the permitted use of variable interest and balloon payments
These laws opened the door for the development of a subprime market, but subprime lending would not become a viable large-scale lending alternative until the passage of the Tax Reform Act of 1986.
On the Community Reinvestment Act:
Approximately half of the loans were made by independent mortgage companies which were not regulated by CRA at all, and thus had no government obligation to offer credit to minorities. These companies made subprime loans at twice the rate of CRA banks. Another third of the major subprime lenders had very little CRA involvement. Further, the weakening of the CRA in 2004 was followed by intensified subprime lending. The chief executive of Countrywide Financial, the nation's largest mortgage lender, is said to have bragged that to approve minority applications lenders have had to stretch the(CRA) rules a bit, suggesting that lenders were responsible for relaxing standards rather than the other way around.
This has been a long time coming, during the Clinton era they wanted all Americans to have the American dream of owning a home. I am not blaming Clinton, the blame lies with the lending companies that allowed people to take out a mortgage for less money than the lenders had to pay to borrow that money (sub-prime loans) and people were buying homes that both they and the lender knew that they could not afford.
The sub-prime loans were interest only for 5 years then would revert to a regular loan, borrowers though that they could sell and take their equity and then buy a home they could afford. The problem was that the housing market slowed down and your sub-prime loan was a negative amortization, meaning that every time you made a payment you owed more than you did. With a slow real estate market housing costs declined so you are now living in a house that is worth less than what you owe on it and at the same time your sub-prime loan is making the transition to a normal loan and your payment increased.
When people started losing homes to foreclosure, the lending institutions were taking back property that even they could not sell for what was owed on it. Each home they took back caused them to lose money.
Most impacted by this was Fannie Mae and Freddie Mac because they bought these loans for other loan institutions.
We now have a snowball effect as a result. It started with home prices skyrocketing (where I live homes that cost $450,000 went to $750,000 in a year and a half), once these costs get beyond the ability of the average person can afford the prices stall and then start to fall.
I'm not so sure that we have our finger in a dike, it seems to be more like trying to bail water on the Titanic and we all know what happened to the Titanic.
Now we could be headed for a depression, this could be hastened if everyone starts making a run on the banks to get their money before it is all gone. That might be a good thing if it would get housing prices back to the $15,000 they were at when I bought mine and it didn't last so long that people didn't starve to deathIs this financial crisis the result of affirmative action in lending?As a dissenting voice here, I say no. I wonder what the supporter's of this administration feel about privatization of Social Security, now that the stock market is in the toilet, rail on about these days. And No, helping and securing the future for the American People is never a bad goal for an American President, it should be his largest goal.
Yet we have the huge suck of 10 Billion per month in Iraq, a military presence brought about by ego and lies, and the allowance of grants, or tax abatements and credits to large companies related to the present administration.
In all of this we have someone who bankrupted three of his own businesses, telling us that American companies who are going to fail should be allowed to. I am supposed to trust that his plan - which never saved any of his companies - is sane, or at best, well thought out? He caused this! He had a balanced budget, and a plan to go to war the minute the courts decided the election.
Look up PNAC - Partnership for a new America. Look up Curve ball - the source widely used for going to war. Look up Bush on WIKI - unless they have scrubbed it, you have all the information there. He has learned good business tactics through osmosis in the past 7 and 1/2 years? I think not.
What really galls me is that now, after more than seven years of being lock step with Bush, McSame is calling his campaign the promise for change. Change from what? One bad administration for another of the same ilk?
If we all had the pedigree to allow us to go from one failed business to another, we, too, might end up President one day. I want a better choice, and I want to hear from them as soon as possible. Friday would be good.
I am for some sort of intervention in the financial crisis. I am not sure that 700 Billion is more or less than what is needed, and we have smaller businesses all over the country living on string budgets these days. I want oversight, and I want bonuses and payment to top executives capped at reasonable levels. George pushed “no school left behind” why not no business or no family left behind when closing because of circumstances beyond their control...gas prices, energy prices, the price of goods and services... and on and on.
This moment of clarity was brought to you by my own imaginative NPO, The League of Concerned Voters Speaking the Truth, and by the letters D, U, N, C, E and the number $7,000,000,000.00.
JoelD, you have my vote for best answer.
And ISay, you are totally correct questioning if this crisis is only race related is totally on point. I know many friends who are worried - of all backrounds - because of this financial "terorisim" brought to us by GWB.Is this financial crisis the result of affirmative action in lending?
I don't know. I have not seen the statistics on it. However, I would say that basically it is from the same thing as it always is....GREED. People who can't afford the house payment should not be encouraged to take out a loan for a house. But, when you can sell a house to someone and make your commission, then sell the paper to someone else (Fannie Mae for example), you've made your bundle and have left Fannie holding the bag in the end. Small banks, loan companies, realtors....all had a hand in this.
BINGO!
NEWSFLASH: The congress REQUIRED the banks to stop "redlining" loans. Red lining is where the bank looks at the borrowers ability and propensity to repay draws a financial line and says people under this no loan. Congress took the lending decisions out of the Banks hands.
In fact the goal was to put people in houses who could not afford them then blame the banks so the government would step in and help these "poor folks" keep their homes. Brilliant social engineering!
Our City has a public housing area that has been here 60 years that is now closing. Why? most of the units are now empty!Is this financial crisis the result of affirmative action in lending?
What about personal responsibility and plain old greed? People also shouldn't have taken out a loan if they knew they couldn't afford to make the payments. I wanted a house but didn't buy one b/c I knew I shouldn't buy the cute 1 BR bungalow going for a whopping $400,000 in the housing bubble despite my bank's willingness to loan me the money. I knew I couldn't afford $2,000 monthly payments when I don't earn that much!!! Basic math and responsibility, people!!!
No. It's called: "Creative financing"! No matter the income, people still want their big, fancy houses %26amp; the lenders were only too eager to find ways to lie about the incomes %26amp; the buyers were too greedy to realize they had bit off more than they could chew. One lay off %26amp; the whole thing crumbles.
Yup you are basically correct! Bush and members of Congress have pushed for reforms for years now !! It all fell on deaf ears!! Bush did not push the point as hard as he should have since it would have made him look as if he were "against the poor" !
that sparked a lot of it. it also made banks more lax in their lending policies overall. That on top of congress and people not doing anything about it.
NO.. its the result of the world bank using tax payer money through gas prices to pay for keeping third world country's head's above water.. that and well the printing and circulation of worthless paper
Your point is interesting, but I still think this economic crisis is more about greed and stupity in lending than anything racial.
You my friend, get a star for being educated and finding one of the reasons that this crisis started in the first place.
No , this crisis is the result of WAR AND WAR AND MORE WAR .
Well if anyone brings it up liberals will automatically deem you racist and blackmail you forever.
Yes
I would think the American people would wake up to the fact that the Dems are more at fault then anyone
Ah, another discerning Fox News viewer...
Yes, to answer in the most simplest way
Hear, hear!
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