Civil rights complaint targets Wall Street rating firms

Los Angeles Times ^ | November 30, 2008 | Kenneth R. Harney

[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."

[StAnDeliver]

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...

[StAnDeliver]

"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.

[StAnDeliver]

"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.

[StAnDeliver]

"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.

[javachip]

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

[Batrachian]

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.

[StAnDeliver]

"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?

[rockinqsranch]

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.

[groanup]

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.

[javachip]

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.

[Joan Kerrey]

As far as I’m concerned, let them all rot in court for the next 100 years. To all who participated in this scam, may the rest of your life be miserable. To those who find themselves buried in debt because their mortgage interest rate balooned: You signed the loan papers. If you didn’t know what you were doing you shouldn’t have signed. Grow up, you can’t expect to live in a $500K house for $100 p/month. To those investors and house flippers: you gambled and you lost. It’s no one’s fault but yours.

[autumnraine]

Man, I must have been lucky! I had a teacher in highschool that I would have considered conservative.

[SunkenCiv]

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... alleges that Moody's Investors Service and Fitch Ratings... [assigned] high ratings to bonds backed by mortgages "that were designed to fail" because of "unfair payment terms and insufficient borrower income levels."

[groanup]

Man, I must have been lucky! I had a teacher in highschool that I would have considered conservative.

What was your idea of "conservative" when you were in high school?

[autumnraine]

No, I mean by my conservative standards now, he was conservative.

Of course this was a rural southern state...

[volslover]

They left out the “poor white trash” from their complaints. I guess they perceive white people can’t be discriminated against in subprime lending. Oh, they wouldn’t make it racist it would it, if we include poor whites?