Posted on 01/27/2008 8:26:23 PM PST by 2ndDivisionVet
They had small means and big hopes of owning a house. But African-Americans snared in the US mortgage crisis have seen the American dream turn into a nightmare many call "financial apartheid." The storm triggered by risky "subprime" loans has left many in ruins, forced out of their modest homes and furious at falling victim to financial dealings that have taken a particular toll on minority families.
"People of color are more than three times more likely to have subprime loans," concluded the organization United for a Fair Economy in a recent report which estimated that minorities have seen between 163 billion and 278 billion dollars of their equity go up in smoke since 2000.
With its weakened economy and a large black population more used to renting, Cleveland has become a poster child of the subprime crisis in a country where some 2.1 million borrowers are behind on their mortgage payments.
City officials estimate that foreclosures have swallowed some 70,000 homes and turned entire neighborhoods into ghost towns.
The city has responded by suing lenders, accusing them of targeting black borrowers and steering them to the loans granted with few formalities and at hefty interest rates to people with poor credit histories.
In this city where nearly 27 percent of the population lives under the poverty line -- about 20,000 dollars a year for a family of four -- many have a friend, a cousin, a brother, a co-worker or a neighbor who lost a home because they could no longer make their monthly payments once their adjustable rates jumped.
"Cleveland, Detroit, Baltimore (are) cities where lots of people of color live and what do they have in common? They are hit by the foreclosures meltdown. Is it a coincidence?" said Jesse Tinsley, who lives in the low-income Mount Pleasant neighborhood.
"When the wave of foreclosures blighted our neighborhood, members of our community rang the alarm. Nobody did anything. Now that white suburbs are hit, the city hall discovered foreclosures," he said.
"The mayor didn't do anything for our community for four years, they said 'they deserved it.' Now everybody noticed that we have been targeted by greedy people."
Nikita Bailey, an activist with the non-profit Center for Responsible Lending, warned that the mortgage crisis could empty the pockets of African-Americans.
"Today the subprime market is poised to bring about the greatest drain of wealth the African-American community has ever experienced," Bailey told AFP. "It is a financial apartheid no doubt about it."
For Cleveland Plain Dealer columnist Phillip Morris, the extent of the devastation is comparable to that wrought by Hurricane Katrina, which devastated New Orleans in 2005.
In the hardest-hit suburb of Cleveland, "nearly 24,000 people have lost their homes to Cleveland's Katrina," he told AFP.
"Families left behind furniture, clothing even family photos."
In the hardest-hit district of New Orleans, the real Katrina destroyed about 13,700 houses, displacing some 35,000 people, Morris said.
"More than two years later, 6,000 homeowners (in St. Bernard Parish) have each received an average 65,000 dollars in government funds to rebuild their American Dreams. But in Cleveland and its suburbs, there is no disaster relief, no presidential visits, no good Samaritans to helps us."
"It would have been better if it was an earthquake or a hurricane, we respond better to natural disasters than to men in suits disasters," said city councilor Zach Reid.
In the streets, shops, suburbs and restaurants, resentment against the government and the Washington elite flourishes.
"People in Washington -- George Bush, the US Senate, the US Congress -- witnessed it, they stood by and they didn't do nothing to stop it," said Cleveland resident John Brett.
"It was almost like they were on the Titanic, and they could see the iceberg coming and they did nothing about it," he said sitting at the counter of the Velvet Dog Bar.
"They wrecked our American dreams, the willingness to own a home," he said. "Even during the Great Depression we did not see the number of homes and properties abandoned like we are seeing now."
I think this is an old story that Larry Elder talked about last summer.
Any questions?
I don’t see how they really ‘lost’ their homes when they put nothing down and lived rent free for 6-12+ months till they got evicted. The only ones really losing now are the banks.
That about sums it up.
Always victims.
If there had been no subprime loans, they wouldn't have ever owned a house. As it is, they are out little or nothing in equity.
Neal Boortz was talking about this the other day about how the government leaned on creditors to make risky loans.
No questions here.
Curious, what about auto repossessions?
So the complaints are just sour racist grapes.
Cleveland's Katrina,
"It was almost like they were on the Titanic
"Even during the Great Depression
Jeez, all we need now are mentions of Hitler and Joseph McCarthy.
Absolutely...and now they have the audacity to blame the banks excusively.
Maybe such people really just need to get a brain and take responsibility for their (in)action.
Hold on. These are the people who vote Democrat 90%+ of the time.
It’s no wonder, then, why they don’t have a brain nor take responsibility for their situation.
or what about a “economic Hindenburg” ?
"They"?
Who is this evil "they" and how did "they" force you to take idiotic loans?
Lets see. Blacks denied financing because they don’t meet credit requirements. Redlining, discrimination, bad bad banks. Blacks given credit, despite not meeting credit requirements, exploitation, discrimination, bad bad banks.
Race and poverty pimps exploiting above. Standard. Yawn.
The sad thing about it is that Mike Hucksterbee is counting on this type of popular mentality.
LOL. If they had thought of it, it probably would have been in the article.
Cheney waterboarded them until they agreed to sign the papers. /s
“financial apartheid.”
Just another racist statment by some blacks trying to get another taxpayer handout. If they would spend that energy into bettering themselves to pay their mortgages instead of seeking handouts maybe they wouldn’t be in this mess.
Who is this evil "they" and how did "they" force you to take idiotic loans?
It's all a conspiracy planned by George Bush, the arch evil conservative white boy. He used n-rays produced by thought control equipment developed by the military to force blacks to take out, zombie like, disastrously idiotic mortgage terms.
Cleveland?
I thought we walled that off and blew all the bridges.
Well, actually, the banks sold that worthless paper to investors, maybe the manager of some of the funds in your 401K.
The ones losing money is us.
He’s fading away. He’s had his moment in the sun. He’s running out of money and intelligent people are on to his phoniness. He’s a humanist; not a Christian. He finances his humanism through socialism. He’s a disgrace to genuine Christianity.
Regardless of color - don’t live beyond your means!
Or if you really have to RENT - save money - beats “interest only loans”.
So, congress tells banks to loan money to poor folks who don’t qualify for credit. Then when home values decline these people stop paying their mortgages, causing the lenders to go under, but it’s the lender’s fault?
I didn’t hear/read Boortz on this topic. Did he relate the 1993 scheme by the Clinton Administration, Reno, etc. to force high risk loans to minorities?
You have ma laughing so hard!!!!
I needed that ... I get so disgusted with irresponsible people using their gender, the color of their skin, ethnicity ... whatever to get money out of YOUR pocket for THEIR stupidity.
Nope, there is no conspiracy to target minorities. It was just Bush and the dems demanding that lenders get everyone into a home, including those that could NOT POSSIBLY EVER afford one. The chickens have come home to roost, and the people who could not possibly ever afford a house are finding the truth in that.
A five year old could have told Bush, the dems and the lenders that poor people who could not afford to pay for houses should never have been lied to and promised that they could own their own house.
But there was no conspiracy to entrap minorities in bad loans. If anything, a lot of poor people got the gift of living in a home for a couple of years — something that would never and should never have occurred.
You have ma laughing so hard!!!!
I needed that ... I get so disgusted with irresponsible people using their gender, the color of their skin, ethnicity ... whatever to get money out of YOUR pocket for THEIR stupidity.
The price of eternal victimhood is the utter loser mentality of enslavement.
"Oh, the insolvency!"
Yawn... On examination, what many blacks actually want is to live in a state of financial apartheid (aparthood); i.e., they want something for nothing (and a whole lot more), with no strings attached. That’s as far apart from the rest of us as you could possibly get. So stop complaining about apartheid already!
Always being “the victim” is not the way to succeed in life. It’d be good if more people realized this.
What makes that racist? Want a good mortgage rate - then stay at your job, have a consistent income history, and a good credit rating by paying your bills and not living beyond your means. It really doesn’t take all that long to build up enough good credit if you can just control your spending and work hard. Put a little money away in some savings (even a tiny bit, as a habit, shows initiative towards financial responsibility).
Again - what about all of this discriminates against “people of color”?
You don’t want the hastle of living responsibly - then don’t gripe about a sub-prime mortgage that you cannot pay... You sign the papers.
These complaining blacks are afraid to leave the ‘Rat plantation to a person.
In the mortgage situation I think of the great words of a Georgia Supreme Court decision in a contract case "those with the ability to read have a duty to read". Why should Blacks be absolved of the duty to pay attention, ask questions and seek unbiased and disinterested advice or counsel when making important decisions?
He talked about it last Tuesday.
Long story short the Black Minister had not been paying his student loans and was in default. Their Realtor was black also and no one and I mean NO ONE buys a house if they aren't paying their student loans and she should have known that!
I ended up closing anyway on the one out of Huntsville since I had shook the mans hand and told him I would close on that date. The perspective buyers proposed a lease buy with a large NON REFUNDABLE deposit so they could have time to get their student loans up to date. They had 6 months to close or I kept their 10% deposit. That upstanding minister never did pay their rent on time. They had no business buying a house they couldn't even pay their existing debts.
They did finally close on my house but I had to threaten to call their mortgage company they were working with and evict them from my home if they were late again. Which they were. I finally told them that the lease they signed gave me the right to evict if just 1 payment was late and I would evict and keep their deposit which was all justified and legally set up that way. These people were just plain dumb or felt entitled. I came away with it all with no respect for Black ministers and people who couldnt pay their bills because someone always has to pay.
They did close and at closing they were 12 days late on their current months rent. I suspect the mortgage company they used ended up lending them either sub-prime or some other creative financing. It was probably all a bunch of white racists keeping them down that was the problem. To them they were entitled to the American dream but they shouldn't actually have to pay for it.
The banks did oversell the dream.
That said buyer beware.
None of us own it. Stop paying property taxes and see who owns what.
That would require a sense of personal responsibility on their part, something from which they feel exempted because they're still fixated on what was done to some of their ancestors by Democrats two hundred years ago.
Money for nothin’ ...
Dittos on that. Democrats made home ownership a religion and the Republicans half imitated them
I have always voted white until today for now on I vote a straight anti-apartheid ticket.
“If they would spend that energy into bettering themselves to pay their mortgages instead of seeking handouts maybe they wouldn’t be in this mess.”
All they had to do was read the contract.
It isn’t exactly news that any kind of an ARM can be a risk unless you are fabulously wealthy.
I think that before this is over, we’ll end up buying a lot of stupid people free homes.
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