Community Answers

1. 

   4-30-11

   Devin says:

   I don’t believe they specifically targeted minorities, but they did target those with poor credit. The shady sub-prime lenders just marketed to whom they could make a quick easy profit.

   Reply

   0

   Was this answer helpful?

   LikeDislike
2. 

   4-30-11

   linkus86 says:

   I don’t believe minorities were targeted. I often saw the aftermath of predatory lenders as a Realtor and saw more white people than minority groups amongst their victims. Their victims were all amongst people who were used to paying for things on time who simply wanted to live above their means at any cost. Personally I blame the appraisers they employed more than anyone.

   Reply

   -1

   Was this answer helpful?

   LikeDislike
3. 

   4-30-11

   the tax lady says:

   http://www.huduser.org/portal/publications/fairhsg/unequal.html
   http://www.nhi.org/online/issues/139/redlining.html

   Reply

   0

   Was this answer helpful?

   LikeDislike
4. 

   4-30-11

   Steven says:

   One big company actually did. Am*&*$ #^^t. No longer in business like every other sub-prime lender.

   For the rest of the industry it was about finding customers who lived in area’s where property value started to soar, needed money and didnt have the best credit. Just so happens a lot of these people were minorities.

   The real mess started when Wall street started finding money all over the world for mortgage backed securities.

   That’s when you started to see loans where someone with a 580 credit score could obtain 100% financing without providing any income documentation or having to show any assets. Any knucklehead with a heart beat and the ability to sign his name got a loan to buy a house…..and usually a big expensive one.

   This drove up property value everywhere (because knuckleheads were buying homes everywhere) and everybody all of a sudden had equity to pull out to invest in things like Harley’s, 20 inch chrome rims and European vacations.

   Reply

   0

   Was this answer helpful?

   LikeDislike
5. 

   4-30-11

   Kevin Williams says:

   I think the subprime crisis created an enormous amount of opportunity for people to create wealth for themselves. Hate it or love it it the vast majority of people who got these loans are still current with their mortgage. It was never about class or color but targeting people’s “need”. I just find it sad that the majority of the people who are in foreclosure are not taking ANY responsibility for their poor financial decisions. Ignorance appears to be the order of the day. Bottom line, is if you do not maintain your car payment or ticket payments your car get booted or the repo man pays you a visit. homeowners who cannot afford a mortgage should pack their “stuff” and give the bank back their property and stop moaning. It dosent matter how crazy the loan was…..if you cant afford the mortgage payment get out.

   Reply

   0

   Was this answer helpful?

   LikeDislike
6. 

   4-30-11

   glenn says:

   I have been a real estate agent/broker for 33 years.
   What I think happened over the last 15 years or so was a well intentioned movement to try and get a huge percentage of the population to become homeowners.
   Government punished lenders that did not create ways to help low income people to buy homes- and praised those that came up with new programs.
   FHA had “gift programs” that let sellers not only pay all the buyer’s closing costs but also (in a round about way) pay the buyer’s down payment! Of course a seller had to sell the home at a higher price so they could afford to do this-so the buyer was really paying for all this themselves and piling it into the loan.
   Conventional loans were often set up with a first and second lien and the companies would often “allow” the buyer not set up an escrow for the budgeting of once a year property tax bills and hazard insurance policies.
   Neither of these have been called “predatory” but they have caused a huge number of the foreclosures and they were aimed at people without cash up front- not by race. But I think proportionally more of these people were minorities than the general population simply because of the government goals. Look at what the government was pressuring the companies to do.

   A true “predatory” loan would be a loan with fees and rates much higher than the market that was not warranted by the risk for the lender. I did see that happen a lot to a lot of people- but not near the numbers as I saw the other bad practices. And these companies did not care who they got as long as they got money.

   Reply

   +1

   Was this answer helpful?

   LikeDislike
7. 

   4-30-11

   loanmasterone says:

   You have to realize that sub-prime mortgages had been around a long time, they did not just pop up in the late 80s and early 90s. This type mortgage product has been available before the 70s.

   Minorities were not particularly targeted for sub-prime mortgage loans.

   These loans were also obtained by individuals that wanted to go into business as most of them did not take long to process from start to finish.

   Then you had those that wanted to buy high item values such as boats, ski jets, cars, income property and other risky or in some cases sound investments. Again the reason was less paperwork and the time involved in the completion of the process.

   Were there minorities that got these sub-prime loans? Yes there were because at the time Barny Frank, Maxie Waters and all their congressional buddies thought that each and every American should own a home.

   It mattered not if they had the means to pay the mortgage loan or not as long as they could own a home.

   I worked for a major sub-prime lender in management based in Orange county California. We were required to complete a report to the government concerning the number of minorities we did mortgage loans for, the income brackets they were in then give percentage of minorities based on the number of loans we did per month. If were did not hit our percentage of minority loans we were place on probation with the stipulation that we would not be able to get funds for future mortgage loans if we were not in compliance in the following months.

   Some lenders were fined for not lending to minorities or those that were considered minorities if they were not in compliance.

   These sub-prime mortgage loans had a 2-5 year low fixed interest rate after which they would revert to an adjustable rate mortgage.

   The homeowner was told that they should make the monthly mortgage payments on time and if they did, by the time the adjustment came around they could then refinance this mortgage loan into the current 30 year fixed rate, because the house would appreciate in value thus the refinance would be no problem.

   This time there was a hitch. The property values did not appreciate as in the past. Since the property did not appreciate there was no equity in which the home owner could refinance this mortgage loan.

   Since the mortgage loan adjusted to an adjustable with the interest rates that could adjust anywhere between 3, 6 or 12 months the homeowner was not able to keep up with the monthly payments.

   The result was since they were not able to make the monthly mortgage payments an unusual amount of properties were then placed in foreclosure. This increase caught the eye of wall street because now they had securities that were no longer earning money for their investors.

   Then our government decided to bail out the banks.

   I hope this has been of some benefit to you, good luck.

   “FIGHT ON”

   Reply

   +1

   Was this answer helpful?

   LikeDislike
8. 

   4-30-11

   don1862 says:

   No. Irresponsible minoirities who want to get out of their liabilities may claim so, but there is zero evidence that any lenders did that.

   Reply

   -3

   Was this answer helpful?

   LikeDislike
9. 

   4-30-11

   investingharmoney says:

   The bank does not want home that have gone to foreclosure. A lot of the time the property is worth as much to the bank. The bank does not want the hassle of selling the property either. Think of how most people would leave a home that the bank told them they had to move out of and possibly go homeless. People will not upkeep a house once they find out it is going to be taken away from them.

   Reply

   +3

   Was this answer helpful?

   LikeDislike
10. 

    4-30-11

    ~Laura and Scott says:

    Mr President Bush, I told you this once before. You have advisers to help you with this. I like your new code name tho.

    Remember, when a bank Repo’s a house for $ 400,000 but it is only worth $ 200,000, the bank will lose $ 200,000 on the deal. Now take that amount and times that by 10,000 houses being Repo’d. That is more money than you are spending on the war in Iraq.

    So Mr President, do you understand why you have to bail out the US people and the Banks? Remember if you take all their money now, they can’t buy your gas later.

    Ya that’s right, I knew that would hit home.

    Reply

    0

    Was this answer helpful?

    LikeDislike
11. 

    4-30-11

    Samarcanda says:

    well, how would you feel if you went to the bank to withdraw money and the bank didn’t have any?
    Sure, there are plenty of people that OWE to the bank (about half the population!) but if the bank has no actual CASH to give YOU then things come to a crunch.
    What happens if the bank is also in the insuring business and a Thyphoon strikes and flattens 3.000 houses? The bank needs money UPFRONT, HARD CASH to pay up for all those damages.
    Now, was there any damage done to houses recently? Let me think…

    Reply

    +2

    Was this answer helpful?

    LikeDislike