Now Banks Sued for “Reverse Redlining”
Posted on December 1, 2008
As a lawyer for ACORN, Obama exploited the Community Reinvestment Act to inflict race-based extortion on the mortgage industry, helping to bring about the collapse of Freddie Mac and Fannie Mae, which led in turn to our current economic crisis. Now the same racket is setting it sights directly on Wall Street:
In what is apparently the first legal action of its kind, an association of community-based organizations has filed a federal civil rights complaint against two of the three largest Wall Street rating firms, charging that their inflated ratings on subprime mortgage bonds disproportionately caused financial harm to African American and Latino home buyers across the country.
The complaint, filed by the National Community Reinvestment Coalition, alleges that Moody’s Investors Service and Fitch Ratings enriched themselves by assigning high ratings to bonds backed by mortgages “that were designed to fail” because of “unfair payment terms and insufficient borrower income levels.”
The firms “knew or should have known” that subprime loans disproportionately were marketed to minority consumers — a process known as “reverse redlining” — and that those borrowers would ultimately default and go into foreclosure at high rates, according to the coalition’s complaint.
If a minority wants a loan, lending institutions must provide it, regardless of the likeliness it will be repaid, or get sued for “redlining.” If they do give the loan, and it has to be foreclosed on, the lenders get sued for “reverse redlining.”
Why not cut out the lawyer middlemen and just order banks to hand over free money to anyone who isn’t Caucasian?
On a tip from Al C. Cross-posted at Moonbattery.
» Filed Under ACORN, Anti-Americanism, Economy, Marxism, News, RICO, Socialism, Stupidity
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5 Responses to “Now Banks Sued for “Reverse Redlining””
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I don’t understand how the liberal illuminati can make literally everything about discrimination. Is there a way to do anything right, without offending people? This is an indication that the answer would be “no.”
Discrimination per se is not illegal — although many people will claim that. If I weren’t permitted to discriminate, ever, I would have no choices available to me, ever.
Discrimination based on the ability to repay a loan is not illegal discrimination. Many recent college graduates, especially the ones with degrees in areas like “theater management,” probably can’t qualify for a mortgage regardless of race or gender.
The problem arose when Congress stuck its nose into the issue first with CRA and then with the notion of “affordable housing” and lowered mortgage underwriting standards via Fan and Fred. All of that came with the threat of prosecution for redlining — and the promise of federal government backup in the event the mortgages went sour. We can see how well that worked out.
Apparently ACORN isn’t done bankrupting the US economy.
I’ve added your post to BlogWatch – Economic Meltdown
It is a never-ending circle of stupidity.
Had Moody’s, Fitch, and S&P NOT rated those bonds as they did, there would have been no money in the system to be making loans, and they would have faced a discrimination suit for disrupting funding for housing to said minorities. The fact that borrowers could not (or would not) repay loans was entirely irrelevant; what WAS relevant was bloated statistics showing more minorities to be homeowners than ever before.
NOT providing a high rating, with these mortgages being backed by the UNITED STATES GOVERNMENT, would have screamed loud and clear to investors across the globe: DO NOT INVEST IN THE US GOVERNMENT, IT IS JUNK.
That obviously would have had a far more disturbing result – and on a lot shorter time line than the current failure.
Regardless, they cannot get it through their heads that the more they fiddle, the worse the outcome. It’s not a difficult concept to grasp, that the market is inherently self-correcting and external manipulations (over-regulation, subsidizing an industry, over-taxation, wage controls among others), leads to ever harsher – yet completely predictable – corrections.
What’s worse, they seem to believe money really DOES grow on trees. If the junk backing the bonds had been declared as such, no investor would have touched it with a 90-foot pole; but they think that money’s still there for the grabbing?