Are Subprime Loans Racially Targeted?
 

The NAACP thinks so!

"In July, the National Association for the Advancement of Colored People, or NAACP, filed a discrimination suit against 11 of the country's largest lenders, saying minorities are steered toward high-cost loans more often than whites, even after all risk factors are considered.

The ACORN study found that high foreclosure rates cause higher rates of crime, lower tax revenue and property values. In other words, whole minority communities, not just individuals, are hurt when houses go under, said Hilary Shelton, director of the Washington D.C. Bureau of the NAACP. "

http://news.yahoo.com/s/nm/20071126/..._minorities_dc


Is it me, or do you think the same results would be evident if you compared younger homebuyers to older homebuyers? Some lawsuits are just frivolous, and this is one of them. Think of what positives could be done with the money that will be wasted on their defense. What a shame. :(

It's already been proven it's true unfortunately. Some suits are frivolous, this one isn't.

I have seen some as high as 28% when a fair rate is supposed to be between 6-8%.

Predatory lending is a problem and it has to be stopped across the board. Unfortunately the brokers that tend to setup these kinds of loans target blacks and the banks that handle them generally suck them in and do as many deals possible then sell off the debt in various ways so they can get out of harm's way scott free when all hell breaks loose (as it's doing now).

It's nice to see the NAACP is actually targeting a real problem for their people for a change.

Maybe that's true, but I've heard the same for a lot of people..especially younger individuals with bad to semi-decent credit. I think many variables would need to be investigated before money is taken from an already slumping industry.

1. Were the agents that targeted a specific group of the same or a different minority?
2. Were some offices pushing harder on higher interest loans than others within a company?
3. What were the average credit scores of those involved?
4. How many points were added on avg. for specific dings? For instance, no doc, lower credit scores, lack of 6 months of income in the bank on a no down loan, etc.

Those are just samples. When I was buying my first homes, I shopped around to different lenders and was quoted many different rates. Some varied up to 8%. At the end, it was MY job to research rates, shop around and read contracts. I don't feel this should be any different based on skin color. It has to do with people not settling on the first price they are quoted.

As a similar parallel, when you buy a car, you are often offered APR's damn near 25%. The bargaining is done once the first offer is made, and it is your responsibility to negotiate the best deal. Sure it may take all day and quite a bit of research, but a person (or group) can't blame people making commissions. If a person rolls over and takes what's first offered, they will definitely get shafted. How many salesmen do you know that won't try to earn the biggest commission possible?

What should be done is the NAACP putting their defense money towards setting up loan education (in general) for people blanketed under the NAACP's umbrella. Taking from an already hurting industry will not solve anything, but it will help flush our economy further down the proverbial toilet. It's a sad thing that this country is so damn lawsuit happy. People will never learn to be responsible if there's always a lawsuit waiting to clean up the poor judgement of a few individuals. :(

People got loans that should have never gotten loans in the first place, end of story. All these lenders saw was the big $$$ and they were making shit up on their applications just to get them in the door. People that were buying the house were not going to take time to read the fine print or do some research, they were getting a house and that was their dream. Everyone needs to shoulder some of the blame because everyone had some part in creating this mess.

Subprime loans strictly target those with poor credit and finances, a disproportionate amount of which are black. I don't understand why people have such a hard time accepting this. The people these loans target honestly have no business owning a home in the first place, and if they do they pick a home that is way above their ability to repay the loan on.

All of the rent to own places target people like this, too, and I don't think you can call them racist. Is it Rent A Center's fault if the vast majority of their customers are African American? Why can't anyone take personal responsibility instead of always wanting to pass the buck on blame.

Credit card companies target middle class to affluent white teenagers in college and I never hear anyone calling them racist. When I started college at the University of Miami my first day on campus there were about 20 tables set up with credit card companies offering free t-shirts and lunch if you filled out a credit application. I had a shit job and zero credit and never imagined I would get approved, so I filled a bunch out. A few weeks later my mailbox was full of credit cards, some with credit lines as high as $5000.

The credit card companies assume that when you charge your cards up and default on the debt that your parents will bail you out, and most do. I didn't have that luxury for quite a while and was drowning in debt before an uncle bailed me out. The bottom line is any company that extends credit doesn't give a shit what color you are, only how they can fuck you...

Also keep in mind many of these predatory loans were not made to home buyers but to those who needed help with their current home. They went in and convinced or out right lied to people (specially seniors and minorities) who already either owned their own home free and clear of was a few payments behind. Not only did they fuck them in the ass with a huge ass loan, often they stole the homeowners equity and turned them from home owners needing assistance to house renters in their own house with no equity anymore.

ridiculous .. it would be the opposite way , rather than being penalized because you are black its more like being rewarded for being white.

either way it doesn't sound plausible right off the bat to me.. why would someone make less money if they could make more money ..

people who own dogs might have a higher rate on average this doesn't mean that dog owners are discriminated against .

i think we all agree this has taken place but do you really think financial institutions told their loan officers to target black people ?

Well I think some loan companies may have. Actual banks, nah I find that doubtful.

I know first hand since I own a house in a "poorer" section of my city. During the big housing boom and when loans where floating around. I was receiving phone calls, post cards, as well as door to door salesmen trying to get me to cash out for an interest only home equity line of credit in excess of 125 to 150% of my homes value. Oddly now these same companies offices are now empty and again for rent in the shopping centers they popped up in.

let me get my tinfoil hat

I think that has way more to do with it being a poor area than a black area. If it was a predominantly affluent black area that wouldn't have happened. If a black area equates to a poor area of course they will target that...

I am not neccessarly agreeing with that it is racist. I just agree it is more to do with being predatory than anything else.

but you're not black ? or are you ?

the idea in this type of loan is loan money to someone without the ability to pay it back , choosing only black people means you would be throwing away cash..

your target is anyone who can't payback the loan. thats it..

white people should sue black people for "crack discrimination" , they are always hustling overpriced crack to whitey , when we know the crack dealers give their own kind price breaks.. grr.. :winkwink::1orglaugh

Well I technically am a minority.

This thread reminds me that sometimes it just doesn't make sense to argue ethnic issues on GFY.

and we have a winner!

No, its targeted based on intelligence and desperation. Blacks are short on intelligence and long on desperation, so yeah, I suppose so. But whatever, the NAACP is not to be trusted with anything. They don't want to help the blacks, they want to simply reverse the roles and make white people the n1gger. The blacks really don't realize it, but the NAACP and organizations like it go more harm for them than good.

I'm not real big on organizations like that but do you seriously think what you are saying is true? That would make them about as bad as the Klan.

Fellas, lot of black leaders and some of the organizations have cried wolf in the past. This is true. But there are times when an issue is based on reality and it does need attention. Most minority groups have have negative issues that are specific to them that needs changing. Some of those issues are created by them, and some are imposed on them, still.

We aren't in a perfect world yet. I know some of you think we are, but it's just not there yet. A lot of their problems most of you don't see and, fortunately for you, couldn't relate to the problems even if you could see them so to you they don't exist... but they really do.

I see that in a lot of your responses in this thread. "No, this couldn't possibly happen." "Everything is fair an equal, I don't know what the n1ggers are crying about now!"

It really is sad to see that from some of you.

African Americans are poor and uneducated, what does it have to do with their skin color?

I would also target Blacks. They are a highly profitable population for consumer/mortgage lending. :)

aren't we all at some level. i'm not trying to minimize your situation but i dont think they would target you because you were a minority first , they target anyone who they think can't payback a loan.

What it boils down to is a math formula more than anything . They input the numbers the computer spits out the answer right..

with that being said it also boils down to a personal judgement on some level. the computer may spit out the answer but if you only input certain people , you will get certain trends.

Oh I firmly believe what your saying.

I just did take the time to listen to one of the door to door dudes. Everything he was spouting was almost 100% different than what was in the fine print of the documents. Not even small things like points or potential interest rates after the interest only loans phased out. To actually giving them power of attorney in regards to title matters on your house.

Now my street which is more up and coming than poor in reality is full of mostly senior citizens. Many of whom if not extra leery of people in general thankfully because most of them barely can read average type let alone the super fine print that basically gives them your house and your equity for a small loan after you pay them for the privilege of loaning you money. Oh when I say pay them for the privilege I am not talking about the interest, I am talking like upwards of 40% of the loan value when the loan is issued.

anyone that thinks people doing predatory lending do it for anything but the $$$ are idiots and anyone that thinks anyone cares if the $$$ is comming from a white person or a black person is also an idiot.

In the end its all about the $$$$

I really hope you don't think I'm sitting here with blinders on. I am raising some valid points and definitely am not trying to throw out a racist card. I really DO want to see if these institutions are intentionally targeting African Americans. If so, then I think compensation is in order...However, do you think the NAACP will fairly disperse the possible compensation to home owners who were treated unfairly?

If I am totally off base, please put me in my place. I just thought I'd bring up a few parallels and see if my thinking is flawed, and why.

Of course they intentionally target African Americans, what's wrong with that? There are TV channels, magazines and a lot of businesses targeting African Americans.

Business is business, u sound like a bigot playing the bigot card, just like stalin used terror card to impose terror.

The biggest bigots are anti-bigots, bringing race in every topic.

Please GFY. :321GFY

Smokey, that's what I mean. It would be wonderful if you could quantify it down to a mathmatical fact but that's not the case. When you are in a situation where you never see the human element it's near impossible to understand what's going on. Most of us here have been fortunate enough to hot have to deal with this first hand so it's near impossible to accept anything unfair is happening.

If you think this began and ends with Subprime mortgages I have news for you, it happens in every situation that involves the negros.

Let me take you back to a NYTimes article to give you a clearer view of the situation:

[quote=NY Times.com] Review of Nissan Car Loans Finds That Blacks Pay More

By DIANA B. HENRIQUES
Published: July 4, 2001

A statistical study of more than 300,000 car loans arranged through Nissan dealers from March 1993 to last September -- believed by experts to be the largest pool of car loan data ever analyzed for racial patterns -- shows that black customers in 33 states consistently paid more than white customers, regardless of their credit histories. Read more

Was it that Nissan made sure to hire racists? No, I doubt it. It's more of a general outlook when it comes to people in the finance department and black people. I don't know if it subconsciously happens or it's intentional, but either way the loans that are given to African Americans and minorities in general are less than savory as a rule.

That's why it's necessary for a group like the NAACP to step out and call attention to it. In cases like this a lawsuit isn't the point. The point is just to make people mindful of what they are doing because it isn't right.

It's wrong when a race is targeted for doing ill intentioned things. I know you're playing the troll card, so I will give you the benefit of the doubt. I was attempting to have a debate free of racist jabs...but of course, this is GFY and people enjoy playing the role of keyboard warriors.

Please check my post history, as I never steer in the direction of race debates. I am in an interracial marriage myself, so please spare me the bigot remarks. Only people with lack of intelligence try to generalize people into groups without noticing a person' genuine interest in learning about the opposing side. I found this suit ridiculous, so I felt I needed to see another side. It's nothing more, nothing less.

I guess higher learning did more harm than good when we were urged to question the misunderstood.