Quote:
Originally Posted by slavdogg
There is another reason for banks issuing so many subprime loans. You might remember how in mid to late 90s there was a bunch of law suits targeting banks to force em to give out more and more loans to low income families. Law firms were calling it discrimination that low income families, maybe of them being minorities were unable to get a home loan.
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That would be accurate in the case of bank loans that were made and then sold to Fannie and Freddie. Those banks were sued for violating the Community Reinvestment Act.
As the article tony404 pointed out said, 84% of subprime loans were made by private lending institutions. (i.e. mortgage brokers who then sold the loans to Wall Street)
Regular commercial banks were not offering alot of the loan products that got us into this mess.
The lawsuits you're referring to were made by people who had adequate down payment and couldn't get a loan because of the neighborhood the house was in or other things like that.
I challenge you to find me one lawsuit (that was won) where a person sued because they couldn't buy a house with no money down, or couldn't get an interest only or negative amortization loan.
I started my own thread about this awhile ago
http://www.gofuckyourself.com/showthread.php?t=860280
I basically put together the same dots that McClatchy newspapers did in this article Tony posted. Good find Tony.