Correct me if I’m wrong, but wasn’t evil Redlining what banks used to do before the Community Reinvestment Act made the huge push into sub-prime mortgages?
“Black folks don’t tip, and so managers can’t maintain a quality staff. And if they can’t maintain a quality staff, they can’t maintain a quality restaurant.”
This is true. Now having said that, how do I prove I’m not
a racist? Not that I really give a hoot, just curious.
Nothing personal to you Shadow.
“Correct me if I’m wrong, but wasn’t evil Redlining what banks used to do before the Community Reinvestment Act made the huge push into sub-prime mortgages?”
Yes, in theory, they drew red lines on the map in areas where they could not make loans pay. These turned out to be black areas. But it wasn’t a theory. Loans made on properties in those areas defaulted at many times the rate in other areas. ACORN sued with government supplied money and won. The banks had to make loans specifically in those areas. But Fannie May and Freddie Mack bought the bad paper and bundled it. So, the banks were not actually taking risks with their own money. That’s how the property bubble inflated. Then, when the interest rate on the adjustable rates went up, 7% of the loans defaulted. But the bundled paper greatly multiplied the effect and caused a cascading failure. This is now happening again.