Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Civil rights complaint targets Wall Street rating firms
Los Angeles Times ^ | November 30, 2008 | Kenneth R. Harney

Posted on 11/30/2008 10:49:56 AM PST by libstripper

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."

(Excerpt) Read more at latimes.com ...


TOPICS: Business/Economy; Crime/Corruption; Front Page News; Government; News/Current Events
KEYWORDS: acorn; chutzpah; cra; mortgages; subprime
Navigation: use the links below to view more comments.
first 1-5051-56 next last
Having forced outifts like Moody's to overrate toxic securities, these community groups are now suing the rating services for doing the very thing they wanted the services to do.

One of the best lines FTA:

d subprime loans been distributed equitably," the complaint estimates, "losses for whites would be 44.5% higher and losses for people of color would be about 24% lower."

How, perchance, could ARMs and other dubious mortgages be "distributed more equitably" to people, like me, who never wanted anything to do with them??

The people who ought to be suing the services are pensioners wnd other investors who bought toxic securities on the basis of the services' inflated ratings and lack of due dilligence. Of course, a class action suit like that would blow the whole CRA scam.

1 posted on 11/30/2008 10:49:57 AM PST by libstripper
[ Post Reply | Private Reply | View Replies]

To: libstripper

Can we sue the community organizers?


2 posted on 11/30/2008 10:51:25 AM PST by Larry Lucido (Free Brightside. And re-free Lazamataz.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: libstripper

Wall Street is all Democrat. Let them fight on with the community organizers.


3 posted on 11/30/2008 10:53:56 AM PST by pnh102 (Save America - Ban Ethanol Now!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Larry Lucido

The community organizers who actively pushed for these mortgages deserve to be sued as well.


4 posted on 11/30/2008 10:53:57 AM PST by SumProVita (Cogito, ergo...Sum Pro Vita. (Modified DeCartes))
[ Post Reply | Private Reply | To 2 | View Replies]

To: libstripper

To all you bankers who drank the PC kool-aid: HA, HA!


5 posted on 11/30/2008 10:54:11 AM PST by rbg81 (DRAIN THE SWAMP!!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: libstripper

These corrupt democrat party vermin who destroyed the US and world economies remain extremely dangerous.


6 posted on 11/30/2008 10:55:10 AM PST by FormerACLUmember (When the past no longer illuminates the future, the spirit walks in darkness.)
[ Post Reply | Private Reply | To 1 | View Replies]

This news isn’t so bad. It means we’ll be able to sue Obama when socialism doesn’t work.


7 posted on 11/30/2008 10:55:41 AM PST by NeoConfederate
[ Post Reply | Private Reply | To 2 | View Replies]

To: libstripper

Sheesh! They got subprime loans because that is what they qualified for. Their alternative was NO loan. Now they want to sue about it. Race pimping at its best!!


8 posted on 11/30/2008 10:56:56 AM PST by Anti-Bubba182
[ Post Reply | Private Reply | To 1 | View Replies]

To: libstripper

Yes, normal borrowers should have opted for crazy balloon loans and lied on their mortgage applications in order to obtain worse deals and ensure “equity”.

Stated differently, too many “minorities” and not enough “whites” lied on their mortgage applications.

The brazenly meretricious nonsense that springs from the mouths of lawyers boggles the mind.


9 posted on 11/30/2008 10:59:23 AM PST by angkor (Conservatism is not a religious movement.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: libstripper

..... More evidence that real life is an order of magnitude weirder than anything a fiction writer could possibly conceive on his most acute drug trip.


10 posted on 11/30/2008 10:59:45 AM PST by Senator John Blutarski (The progress of government: republic, democracy, technocracy, bureaucracy, plutocracy, kleptocracy,)
[ Post Reply | Private Reply | To 1 | View Replies]

To: libstripper

I see we’ve learned nothing from the subprime meltdown.


11 posted on 11/30/2008 11:00:09 AM PST by skeeter (Its Barry's fault)
[ Post Reply | Private Reply | To 1 | View Replies]

To: libstripper
What do you expect this "association of community-based organizations" to do? Nothing?

These infernal capitalists took away their ability to sue for undervaluing the bonds. Their only option is to sue that they overvalued them.

12 posted on 11/30/2008 11:01:01 AM PST by 1rudeboy
[ Post Reply | Private Reply | To 1 | View Replies]

To: libstripper
Economy Collapses; Women, Minorities Hardest Hit
13 posted on 11/30/2008 11:01:11 AM PST by pabianice
[ Post Reply | Private Reply | To 1 | View Replies]

To: angkor
There is a small gem of value in this lawsuit.
In the hands of the right attorney, it could be the indictment of government meddling in finance, CAFE, etc.
14 posted on 11/30/2008 11:01:30 AM PST by Eric in the Ozarks
[ Post Reply | Private Reply | To 9 | View Replies]

To: libstripper
Talk about the tail wagging the dog! The moment I read the Headline, ACORN immediately came to mind.

This fiasco has ACORN's, the CRA's, and The Democrat Party's fingerprints all over this mess, and of course the Boot licking Pravda West Media is unwilling to do their job and report the facts.

15 posted on 11/30/2008 11:04:32 AM PST by T Lady (The MSM: Pravda West)
[ Post Reply | Private Reply | To 1 | View Replies]

To: libstripper

Un...well...I think that....forget it, I’ll retire to Bedlam. -:)


16 posted on 11/30/2008 11:05:10 AM PST by Wegotsarah.com (My amateur blog--www.wegotsarah.com)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Larry Lucido

I got rope !


17 posted on 11/30/2008 11:07:08 AM PST by Squantos (Be polite. Be professional. But have a plan to kill everyone you meet)
[ Post Reply | Private Reply | To 2 | View Replies]

To: libstripper

I’m white.

I wouldn’t get an ARM if it was my only option to own a home, I would rent.

Does that make me discriminated against?

Maybe instead of suing Wall Street, they should set up educational shops on how to manage money.


18 posted on 11/30/2008 11:11:54 AM PST by autumnraine (Churchill: " we shall fight in the fields and in the streets, we shall never surrender")
[ Post Reply | Private Reply | To 1 | View Replies]

To: libstripper

These people are freaking nuts. Or they are consciously trying to destroy this nation. Or both.


19 posted on 11/30/2008 11:12:20 AM PST by gitmo (I am the latte-sipping, NYT-reading, Volvo-driving, no-gun-owning, effete, PC, arrogant liberal. -BO)
[ Post Reply | Private Reply | To 1 | View Replies]

To: 1rudeboy

I just read a moron telling someone that capitalism was bad because the retailers would lay off people after the holidays.

I don’t get it.


20 posted on 11/30/2008 11:13:17 AM PST by autumnraine (Churchill: " we shall fight in the fields and in the streets, we shall never surrender")
[ Post Reply | Private Reply | To 12 | View Replies]

To: Eric in the Ozarks

It’ll never get that far, it’ll be settled or thrown out of court.

But it got some publicity, so mission accomplished.


21 posted on 11/30/2008 11:13:38 AM PST by angkor (Conservatism is not a religious movement.)
[ Post Reply | Private Reply | To 14 | View Replies]

To: skeeter
I see we’ve learned nothing from the subprime meltdown.

Amazing, isn't it.

22 posted on 11/30/2008 11:15:10 AM PST by FreeReign
[ Post Reply | Private Reply | To 11 | View Replies]

To: libstripper
The credit ratings agencies are some of the worst villains in this whole mess. They where rating bonds issued by the same people who paid them for the ratings, an astounding conflict of interest. Of course they gave AAA ratings. That's what they where paid to do.

As for this cockeyed lawsuit, it will go nowhere. They tried to sue big tobacco for the same sort of thing. That got nowhere.

23 posted on 11/30/2008 11:22:54 AM PST by Batrachian
[ Post Reply | Private Reply | To 1 | View Replies]

To: libstripper
"Give me control over a man's economic actions, and hence over his means of survival, and except for a few occasional heroes, I'll promise to deliver to you men who think and write and behave as I want them to.Benjamine A. Rooge
24 posted on 11/30/2008 11:30:17 AM PST by FrankR (A lie would have no sense unless the truth were felt dangerous.- Alfred Adler)
[ Post Reply | Private Reply | To 1 | View Replies]

To: autumnraine

the “you owe me” mentality @work!


25 posted on 11/30/2008 11:31:03 AM PST by MissDairyGoodnessVT (Good Morning Mr & Mrs Scooter and All The Ships At Sea)
[ Post Reply | Private Reply | To 20 | View Replies]

To: NeoConfederate
This news isn’t so bad. It means we’ll be able to sue Obama when socialism doesn’t work.

Lemme know how that works out for you...

26 posted on 11/30/2008 11:32:43 AM PST by Onelifetogive (I'm gonna drop talk radio in favor of some audio books. Gotta lower my blood pressure.)
[ Post Reply | Private Reply | To 7 | View Replies]

To: libstripper

They have this exactly backwards. Subprime borrowers received financial benefit, not harm, if the ratings were inflated.

These borrowers, regardless if they’re members of a minority group, obtained loans they otherwise couldn’t have gotten. Those that have been responsible own homes they wouldn’t own otherwise. Those that were irresponsible got to live in a nice house for a quite a while, ultimately at the lenders expense.

Those that bought the mortgage backed securities may have a good case against the ratings agencies. But I don’t see how a borrower getting a loan they otherwise couldn’t have gotten qualifies as financial harm.


27 posted on 11/30/2008 11:33:36 AM PST by javachip
[ Post Reply | Private Reply | To 1 | View Replies]

To: libstripper

“designed to fail”
So this nonsense that was started to help minority group members is now fodder for law suits?

It was a typical well-meaning, feel good liberal solution to a problem, and like all liberal solutions, it failed.


28 posted on 11/30/2008 11:34:44 AM PST by Leftism is Mentally Deranged (liberalism = serious mental deficiency)
[ Post Reply | Private Reply | To 1 | View Replies]

To: libstripper

“How, perchance, could ARMs and other dubious mortgages be “distributed more equitably” to people, like me, who never wanted anything to do with them??”

Well of course the govt would step in and force you to take an arm.


29 posted on 11/30/2008 11:36:11 AM PST by driftdiver (No More Obama! - The corruption has not changed despite all our hopes.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: angkor

“But it got some publicity, so mission accomplished.”

Mission accomplished as in redirecting the discussion of truth that in fact it is the fault of Democrats to one more of a list of contrived Democrat diversions that allegedly are the reasons for the distress we suffer today?

The Lefties are trying so hard to divert attention from themselves for the mess, yet every step of the way was a major Democrat figure from Carter, to Clinton, To Ruben, to Reno, to Dodd, To Frank, and many other Democrat players throughout the process.

The major fear I have right now is they, the ones whom were instrumental in the Subprime scheme are all getting quality positions within the Obama misAdministration, and will be able to further their own agendas’ without much hinderance. The MSM is owned by the Democrats, and the Government Bureaucracies are packed like Sardines in a can with Leftist Bureaucrats.

This means the only chance we really have in the near future to put forth the truth is now, otherwise it will be ancient history by the time of the next opportunity, and the Left will have screwed up everything in the interim.


30 posted on 11/30/2008 11:36:55 AM PST by rockinqsranch (Dems, Libs, Socialists, Call 'em what you will, they ALL have Fairies livin' in their Trees.)
[ Post Reply | Private Reply | To 21 | View Replies]

To: Batrachian

The problem I have as an investor with the credit rating agencies is that they rather clearly did not do due diligence in rating the Fannie/Freddie mortgage backed securities. If they had, they’d have marked them as junk grade or less. Of course, that would have killed the whole CRA scam in the cradle, meaning the rating agencies had to be under as much AA pressure as any other entities on earth to force them to give the fraudulently good ratings they did.

Remember, the whole scam was a chain and every link had to work for it to succeed. Lenders initially had to be forced, enticed, or both to grant the bad loans. Then Fannie and Freddy had to be induced to buy the toxic paper. Fannie and Freddy, however, couldn’t sell the bad paper and raise the money to continue the the scam unless they obtained fraudulently good ratings from the services, which they did. It will be truly interesting if somebody ever smokes out how the services were induced to give those ratings.


31 posted on 11/30/2008 11:40:28 AM PST by libstripper
[ Post Reply | Private Reply | To 23 | View Replies]

To: rbg81

Unfortunately, banks didn’t have a choice. If they wanted to expand, for instance, they had to show that they were giving loans that fit the CRA.


32 posted on 11/30/2008 11:41:07 AM PST by brytlea (You can fool enough of the people enough of the time.)
[ Post Reply | Private Reply | To 5 | View Replies]

To: skeeter

“I see we’ve learned nothing from the subprime meltdown.”

This is a classic “double bind” situation: if financial institution do not make housing available to high-risk groups, they are sued for “red lining”; conversely, if they do make housing available for high-risk groups, they are sued for creating an economic crisis.

Could this be further application of the “Clowen-Piven strategy” for creating chaos and pushing us yet closer to a fully socialist, top-down, command economy?

And the purpose of THAT goal is for the political/financial elite to continue wielding power with no threat of removal from upstarts except those who have been vetted and “approved” by the tightly controlled educational system. The “masses” are kept at bay by providing them with a subsistence level standard of living, with only very slow improvements over a long period of time.

Actually, however, as Ludwig von Mises showed in his excellent work from the 1920s titled “Socialism,” socialist economies prosper ONLY because of the existence somewhere in the world of capitalist, free economies. If the entire world is socialist, there will be market distortations and capital/labor dislocations on a global scale.

Just the sort of societal anarchy welcomed by terror groups on land and sea.


33 posted on 11/30/2008 11:51:43 AM PST by GoodDay (Palin for POTUS 2012)
[ Post Reply | Private Reply | To 11 | View Replies]

To: libstripper
"It will be truly interesting if somebody ever smokes out how the services were induced to give those ratings."

I said how it was done. They where paid by the very firms that wanted the ratings. It would be like a student paying his teacher to grade his work. A clear conflict of interest.

Andersen Consulting was convicted of obstruction of justice (later overturned) in what is in my opinion a very similar case, at least morally.

The ratings agencies will not be prosecuted, however, as they are "too big to fail", and for other reasons.

34 posted on 11/30/2008 11:59:23 AM PST by Batrachian
[ Post Reply | Private Reply | To 31 | View Replies]

To: Anti-Bubba182
>>>Their alternative was NO loan. Now they want to sue about it. Race pimping at its best!! <<<

And the Wall Street firms being sued will probably cave and settle out of court just like they did when Jesse Jackson threatened them.

What Wall Street frim has the guts to call this for what it is.... using the original fraud as a premise for extortion?

35 posted on 11/30/2008 12:02:54 PM PST by HardStarboard ("The urge to save humanity is almost always a false front for the urge to rule - Mencken knew Obama)
[ Post Reply | Private Reply | To 8 | View Replies]

To: libstripper

What were the community organizers advising these prospective borrowers to do as part of their mortgage counseling services?


36 posted on 11/30/2008 12:18:18 PM PST by fso301
[ Post Reply | Private Reply | To 1 | View Replies]

To: libstripper
"had subprime loans been distributed equitably," the complaint estimates, "losses for whites would be 44.5% higher and losses for people of color would be about 24% lower."

And if slots in the NBA had been distributed equally?

37 posted on 11/30/2008 12:19:20 PM PST by freespirited (Honk to indict the MSM for treason.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: libstripper

How did the lenders know the race of the borrowers if asking them their race was considered discriminatory and against federal law? How would a lender be able to discriminate when they did not know the race?


38 posted on 11/30/2008 12:22:40 PM PST by raybbr (You think it's bad now - wait till the anchor babies start to vote!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: libstripper
I actually have an adjustable rate mortgage which had an initial interest only period. I got it years ago as part of planning for a career change. So far it has worked out very well for me. It allowed me to take a new job with a lower salary, gain experience and hang onto my house.

Initially, it was interest only which really helped out. Now it is fully amortizing but the interest rate is so low that the majority of my monthly payment is principal. In the same amount of time, I have paid less on average and applied more money to principal than I would have had I stayed with my original 30 year fixed.

Present conditions do have me thinking about either refinancing or selling out as relocation is a real possibility.

39 posted on 11/30/2008 12:25:25 PM PST by fso301
[ Post Reply | Private Reply | To 1 | View Replies]

To: rockinqsranch

>>>>>>>>Mission accomplished as in redirecting the discussion of truth?<<<<<<

Yes, that’s what I meant.


40 posted on 11/30/2008 12:32:05 PM PST by angkor (Conservatism is not a religious movement.)
[ Post Reply | Private Reply | To 30 | View Replies]

To: libstripper
If someone with a broad reach on radio *ahem* were to handle this exactly right, this bogus lawsuit could finally be the tipping point for tort reform.

Why? Do I have to explain it? Because the American people want perp walks out of the Fannie/Freddie crimes-in-progress to restore consumer confidence...at a minimum, they want Bawhney and 'Countrywide' Dodd...and believe me, the DUMs want to bury this lawsuit...

41 posted on 11/30/2008 12:32:37 PM PST by StAnDeliver
[ Post Reply | Private Reply | To 1 | View Replies]

To: Batrachian
"They tried to sue big tobacco for the same sort of thing. That got nowhere."

You're kidding, of course. It drove Lorillard and a host of other major job producers off the continent.

42 posted on 11/30/2008 12:40:34 PM PST by StAnDeliver
[ Post Reply | Private Reply | To 23 | View Replies]

To: javachip
"But I don’t see how a borrower getting a loan they otherwise couldn’t have gotten qualifies as financial harm."

You have to be kidding. As late as 2007, solid, conservative regional banks -- who have somehow managed to survive this Democrat-driven disaster -- were obligated to not only offer a sub-prime mortgage to unqualified 'borrowers', but also to provide down payments in many instances. Read the f up.

43 posted on 11/30/2008 12:44:02 PM PST by StAnDeliver
[ Post Reply | Private Reply | To 27 | View Replies]

To: rockinqsranch
"The Lefties are trying so hard to divert attention from themselves for the mess, yet every step of the way was a major Democrat figure from Carter, to Clinton, To Ruben, to Reno, to Dodd, To Frank, and many other Democrat players throughout the process.

The major fear I have right now is they, the ones whom were instrumental in the Subprime scheme are all getting quality positions within the Obama misAdministration, and will be able to further their own agendas’ without much hinderance."

Which is why we need a ping list devoted to this very thing, and I nominate you, because you get it.

Some FReepers have greatness thrust upon them.

Consider me your first subscriber.

44 posted on 11/30/2008 12:46:55 PM PST by StAnDeliver
[ Post Reply | Private Reply | To 30 | View Replies]

To: StAnDeliver

Please explain how the borrower is harmed by being offered an option they didn’t otherwise have.


45 posted on 11/30/2008 12:48:30 PM PST by javachip
[ Post Reply | Private Reply | To 43 | View Replies]

To: StAnDeliver
You're kidding, of course. It drove Lorillard and a host of other major job producers off the continent."

I'm not kidding. I was specifically referring to lawsuits that claimed tobacco disproportionally harmed minorities. Those where dismissed, as they where deemed to be "kaka". I know that plenty of other lawsuits did win. Those are not at issue here.

46 posted on 11/30/2008 12:57:44 PM PST by Batrachian
[ Post Reply | Private Reply | To 42 | View Replies]

To: javachip
"Please explain how the borrower is harmed by being offered an option they didn’t otherwise have."

It's ok to offer a desperate consumer a loan that they have little-to-no chance of repaying?

Or have the laws force you to do so, and the Democrats prevent reform of those laws?

And then bundling that worthless-on-its-face loan so it can fuel the incessant hedge fund hunger for the derivative market?

Where have you been?

47 posted on 11/30/2008 12:58:20 PM PST by StAnDeliver
[ Post Reply | Private Reply | To 45 | View Replies]

To: StAnDeliver

Thanks for the vote of confidence, but unfortunately I’m no Ronald Reagan. A man who could be President and still keep up the ranch. It’s a full time job here, and although retired I cannot imagine proceeding in a timely manner with all that would involve such a Ping list.

I’ll pass the suggestion to a good friend, the person whom directed me from another site to FR years ago who knows about operating a Ping List.


48 posted on 11/30/2008 1:43:32 PM PST by rockinqsranch (Dems, Libs, Socialists, Call 'em what you will, they ALL have Fairies livin' in their Trees.)
[ Post Reply | Private Reply | To 44 | View Replies]

To: autumnraine
Maybe instead of suing Wall Street, they should set up educational shops on how to manage money.

They greates allies these people have are economics "teachers" in high school.

49 posted on 11/30/2008 1:52:16 PM PST by groanup
[ Post Reply | Private Reply | To 18 | View Replies]

To: StAnDeliver

It’s pretty clear that either you didn’t understand my comment 27 or I didn’t understand how your 45 applies to the subprime borrowers.

Rather than keep chasing in a circle, have a great evening.


50 posted on 11/30/2008 2:50:10 PM PST by javachip
[ Post Reply | Private Reply | To 47 | View Replies]


Navigation: use the links below to view more comments.
first 1-5051-56 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson