WaPo: The American Dream shatters-in Prince Georges County (Bethesda, Bowie: foreclosed, rent)

[adelphi_sky]

Originally Posted by EdwardA

Except they were mandated, no ordered, by the government to make loans to minorities. There is a noticeable gap in credit worthiness between Blacks & Whites and default rates for Blacks are about twice that of Whites.

Stats? You do know that there are minorities who have good credit and would not default on loans correct? That's no excuse to exploit those who don't and bypass what you KNOW is practical just to make a fast buck.

[North Beach Person]

Originally Posted by adelphi_sky

Stats? You do know that there are minorities who have good credit and would not default on loans correct? That's no excuse to exploit those who don't and bypass what you KNOW is practical just to make a fast buck.

I knew a couple teachers who left the profession to market these "predatory" loans. They were bedazzled by the riches they could earn as commissions and that bedazzlement transferred to their clients.

I don't feel like looking but think back on the stories, and the indictments/convictions, of a few years ago of some of these mortgage brokers in the area.

One story I remember was about a woman who had been on some sort of welfare her entire life and had a minimum wage job. She bought a $1/2 million house in Howard County and of course couldn't even make the first payment.

That wasn't limited to just unsophisticated people. There's a house right down the street from me which is in its second foreclosure since 2007. The first one went up three months after it was originally sold. The second has been building for awhile. Both buyers were involved in real estate, the first as a Realtor while with the second the husband is a builder and the wife a Realtor.

My oldest son bought a foreclosure a year ago. The last mortgage was just under $300K (long time rental investor). My son bought it for $108K and $12K rehab loan.

Remember what I said yesterday about assessments? Post 22.

[adelphi_sky]

Originally Posted by North Beach Person

I knew a couple teachers who left the profession to market these "predatory" loans. They were bedazzled by the riches they could earn as commissions and that bedazzlement transferred to their clients.

I don't feel like looking but think back on the stories, and the indictments/convictions, of a few years ago of some of these mortgage brokers in the area.

One story I remember was about a woman who had been on some sort of welfare her entire life and had a minimum wage job. She bought a $1/2 million house in Howard County and of course couldn't even make the first payment.

That wasn't limited to just unsophisticated people. There's a house right down the street from me which is in its second foreclosure since 2007. The first one went up three months after it was originally sold. The second has been building for awhile. Both buyers were involved in real estate, the first as a Realtor while with the second the husband is a builder and the wife a Realtor.

My oldest son bought a foreclosure a year ago. The last mortgage was just under $300K (long time rental investor). My son bought it for $108K and $12K rehab loan.

Remember what I said yesterday about assessments? Post 22.

I do understand that there were speculators and those wide-eyed individuals who thought they could flip a house inside of 90 days. They were all part of the problem. Speculation is responsible in part for driving up home values. The whole house-flipping phenomenon was taking off as well. I recall watching the shows back then. It was just a crazy time. So, yeah, I understand there were people that knew what they were doing and helped take the market down.

[NOVA Girl]

Absolutely, buyers are to blame, just less so than the banks. The buyers should have known better but the banks should have known best. They held the keys to the vault. They would've never made any of these loans if they weren't allowed to pass their toxic waste off onto others, who in turn turned a blind eye.

[Aimewitue]

Originally Posted by adelphi_sky

I disagree. I don't think you can ever have a stable or fair economy when one party is allowed to commit fraud and the other is exploited because "They didn't know any better." It sounds like how this country treats rape victims. "Well, they should have known better." Yet, the rapist is not held responsible for his actions. The whole country got raped by the banking industry and the government raped us again by giving our money to the very same criminals. But Bob should have known better. Maybe we've been raped so much by banks that we think it's as normal as breathing. So, we need another scapegoat. ignorant Bob. Yeah, I'm trying to change the narrative.

i just don't expect a Capitalism economy based on profit motive to be Fair or Stable. I expect that there would be boom and bust periods. The words FAIR and STABLE....cannot be applied to the profit motive economy. Its always unfair and always changing never STABLE. Yeah the Banks have the Capital and in Capitalism he who has the most capital wins.

Trust me i dont like banks and the after LIBOR scandal its all a big scam. Libor scandal - Wikipedia, the free encyclopedia


But i agree the Banks are to blame. But people still have to be smart. I know a lot of people who didnt get caught up in the US housing bubble. i still believe in the Power of the people despite having the odds stacked against them.

Causes of the United States housing bubble - Wikipedia, the free encyclopedia

[adelphi_sky]

Originally Posted by Aimewitue

i just don't expect a Capitalism economy based on profit motive to be Fair or Stable.

Yeah I agree. Profit and healthcare? Guess who gets screwed.

[EdwardA]

Originally Posted by adelphi_sky

Stats? You do know that there are minorities who have good credit and would not default on loans correct? That's no excuse to exploit those who don't and bypass what you KNOW is practical just to make a fast buck.

Geez adelphi because you know a couple of minorities that have good credit doesn't make up for the data.

Fed: Blacks, Latinos have lower credit scores - SFGate

In a report to Congress that is certain to generate controversy, the Federal Reserve Board says that credit scores vary substantially among racial and ethnic groups, but have made credit more available for major consumer purchases such as buying a home.
The Fed's study, encompassing credit bureau records and demographic data from a national statistical sample of 301,536 individuals, was mandated by Congress in 2003. Credit scores are now heavily used not only in home mortgage underwriting and pricing, but in credit cards, auto loans, employment and rental application screening, and the insurance industry.
Critics have questioned the accuracy and fairness of credit-score models, saying that in some cases they are inherently biased against minority groups such as African Americans and Latinos.

Just like standardized tests, evidently credit scores are racist too.

-- Credit-score statistical factors and models are not biased against any particular demographic group, but accurately predict future payment performance. Lower scores correlate strongly with future delinquencies; higher scores are associated with good payment performance.
-- African Americans and Latinos, on average, "have lower credit scores than non-Hispanic whites and Asians."
-- Younger people of all demographic groups have lower credit scores on average than older people, in part because credit-scoring models focus on payment histories and length of credit accounts. Younger consumers generally have fewer accounts and shorter payment histories.
-- The payment performances of some demographic groups are somewhat worse -- or better -- than their numerical scores might suggest. For example, according to the Fed, "blacks, single individuals, individuals residing in lower-income or predominantly minority census tracts show consistently higher incidences of bad performance than would be predicted" by their credit scores. On the other hand, "Asians, married individuals, foreign-born (particularly, recent immigrants), and those residing in higher-income census tracts consistently perform better than predicted."

[BajanYankee]

^^You sure do seem to enjoy this topic. Are there any other ethnic groups you enjoy discussing?

[adelphi_sky]

Originally Posted by EdwardA

Geez adelphi because you know a couple of minorities that have good credit doesn't make up for the data.

Geeze Edward. Of course I know the data. My point was that though the government program was meant to target minorities, why not target those minorities that have good credit and not exploit those that don't. Of course I know that on average, minorities have lower credit scores. But again, the banks didn't care and went after the ones that didn't have good financial stability like a, well, predator. Probably because there weren't enough minorities with good credit to fill their fat pockets. No one told them to go after people with 520 credit scores and sell them ARMS that reset in 5 years on a $300,000 mortgage. The developers wanted to build, build, build, then unload as fast as possible. Tons of supply meant that they needed anybody and everybody to fill those homes. Perfect storm.

[North Beach Person]

Originally Posted by NOVA Girl

The CRA did not create the housing bubble/meltdown. This is a conservative canard:

No, Marco Rubio, government did not cause the housing crisis - The Washington Post

No one in this discussion said it did.

Save your default position for something else.