NAACP says bank giants steered blacks to bad loans

AP via Yahoo ^ | March 13, 2009 | Jesse Washington

[kddid]

The NAACP is accusing Wells Fargo and HSBC of forcing blacks into subprime mortgages while whites with identical qualifications got lower rates.

Class-action lawsuits will be filed against the banks Friday in federal court in Los Angeles, Austin Tighe, co-lead counsel for the National Association for the Advancement of Colored People, told The Associated Press.

Black homebuyers have been 3 1/2 times more likely to receive a subprime loan than white borrowers, and six times more likely to get a subprime rate when refinancing, Tighe said. Blacks still were disproportionately steered into subprime loans when their credit scores, income and down payment were equal to those of white homebuyers, he said. . . . Tighe estimated that "tens of thousands" of blacks had been forced into bad loans, but said it was difficult to gauge the scope of the problem because banks keep much of their internal data private. The lawsuits could force banks to divulge closely guarded information, such as how banks can determine the race of a loan applicant and how federal bailout funds are being spent. . .

[3catsanadog]

Oh, but it was OK to force the banks over the past how many years to issue subprime loans to minorities with no credit, no down payment, no reliable income.

Darned if you do, darned if you don't.

[domenad]

I can definitely believe Wells Fargo did this. I personally had them ask me to do some patently illegal things to qualify for a loan.

[Doogle]

yeah Frank and Dodd had absolutely nothing to do with it..

(tell me the NCAAP didn’t get a phone call)

[Nathan Zachary]

"It’s a foolproof plan: Sue the banks for not giving loans, and if the banks give in, you can sue them for actually giving the loans that they didn’t want to give in the first place!"

You got it! ACORN'S "community organizing" in action.

[This_far]

“...bank giants steered blacks to bad loans

I didn’t know Barney Fwanks was black. “

Barney may have to use his... Maxine Waters card.

[whatshotandwhatsnot]

I am so blankety-blank tired of hearing this excuse I want to scream! No one, nobody, no way, no how forced these people to accept the loans. Unless someone physically grasped their fingers, put a pen in them and forced it across the signature line they got themselves into a mortgage agreement on their own.

The NAACP makes black folks sound like they are children and must be led around by the hand with someone else to make all the life decisions for them.

[scooby321]

Let me get this straight.

Bank You must loan to blacks to buy homes they don't qualify.

Customer what payment can you afford?

The only way to get to that payment is a sub-prime loan

Fine lets do it.

NAACP sues.

How about going back to the right way 1. Credit history

2. Down Payment of at 15 %. Proof of income.

Oh but they couldn't get a house.

[kitkat]

***but said it was difficult to gauge the scope of the problem because banks keep much of their internal data private.***

Sounds like still another witch hunt.

And the woman who discovered at closing that her interest rate was to be 11 percent should have had an attorney to present the closing statement to her BEFORE closing, and if she did, she should be suing her attorney, not the bank.

[Major Matt Mason]

This is BS. The banks need to fight this stuff. The NAACP needs to show proof that these people were "forced" into taking out these mortgages. Same old scam.

[SueRae]

#4. War if #3 happens

[Islander7]

Black homebuyers have been 3 1/2 times more likely to receive a subprime loan than white borrowers, and six times more likely to get a subprime rate when refinancing, Tighe said. Blacks still were disproportionately steered into subprime loans when their credit scores, income and down payment were equal to those of white homebuyers, he said. . . . Tighe estimated that "tens of thousands" of blacks had been forced into bad loans,

Where's that flashing BS meter? This clown does not have access to the financial records. Also, there is no way to tell who is 'white' vs 'black'.

That information is NOT recorded on loan documents.

[EnglishOnly]

The NAACP needs to find someone who really cares about their inability to read the paper before you sign your name!

I think America should sue the NAACP for improper use of Taxpayer money.

[Doogle]

NAACP...WELL THEM TOO...*GRINS*

[Quickgun]

You are spot on, I can’t ever remember being forced to buy something the seller knew I couldn’t pay for. Also, I have never bought into anything I KNEW I couldn’t pay for. Sometimes I knew I’d have to tighten the belt to pay for it

[MrB]

Oh, don't you know that the evidence of disparate outcome is PROOF of racism?

Blacks still were disproportionately steered into subprime loans when their credit scores, income and down payment were equal to those of white homebuyers

I demand PROOF of this assertion. It makes no sense.

[MrB]

If it’s my money I’m lending, I’m going to make sure the person is capable and probable of paying me back.

However, if someone ELSE tells me that they’ll buy this loan from me with no risk to me, well, I’ll take my commission and let them have it.

Or, if I’m under coercion that my business will be shut down, I might just have to make it a business expense to make a bad loan hear and there. I’ll end up charging the good customers more to make up for it though.

It’s too bad that the majority of Americans have been so INTENTIONALLY DUMBED DOWN that they can’t make these logical analyses of the assertions.

[Nathan Zachary]

"The lawsuits could force banks to divulge closely guarded information, such as how banks can determine the race of a loan applicant and how federal bailout funds are being spent. . .

Are these idiots trying to say that these "victims" didn't even show up in person and talk to a loan officer? They received a loan via the mail?

How are federal bailout loans being spent... Paying for the loans these "victims" defaulted on?

This is one idiotic law suit. But what do you expect from the NAACP, who's black lawyers were automatically "graduated" from law school, and the "passing the bar" test consisted of walking past the bar without going in.

[TruthShallSetYouFree]

The NAACP is accusing Wells Fargo and HSBC of forcing blacks into subprime mortgages while whites with identical qualifications got lower rates....Blacks still were disproportionately steered into subprime loans when their credit scores, income and down payment were equal to those of white homebuyers, he said.

A study done at Howard University reveals that the net worth of black families, on average, is only a fraction of that of white families (16% as of 1998.) So, while credit scores, income, and down payment might be equal, the net worth of the applicant might be very different. The net assets of a borrower effectively act as collateral for the bank. People with more collateral are going to get a lower interest rate. That's Economics 101, Week 1.

[dasboot]

Isn't it the qualifications of the loan applicant that determine the prime/sub-prime status? How can one be ‘steered’ to a ‘sub-prime’, when one's lack of financial wherewithal creates such an instrument, exclusively?

[scooby321]

without a lawsuit, how does the NCAA know “ The NAACP is accusing Wells Fargo and HSBC of forcing blacks into subprime mortgages while whites with identical qualifications got lower rates.” Income, Credit history and job history , down payment and price of home they were buying or is this a drive by statement