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Minority residents in the Twin Cities are much more likely than white people of similar incomes to be rejected for a mortgage, whether they’re buying a home or refinancing. If the home sits in a diverse or mainly nonwhite neighborhood, the application is also more likely to get the boot. Those are the findings of a new study from the University of Minnesota Law School suggesting that mortgage redlining remains alive and well in the Twin Cities. The report suggests that while banks may have justifiably tightened up credit standards, they have swung so far that they are cutting off...

Five years have passed since the onset of what is sometimes called the Great Recession. While the economy has slowly improved, there are still millions of Americans leading lives of quiet desperation: without jobs, without resources, without hope. Who was to blame? Was it simply a result of negligence, of the kind of inordinate risk-taking commonly called a “bubble,” of an imprudent but innocent failure to maintain adequate reserves for a rainy day? Or was it the result, at least in part, of fraudulent practices, of dubious mortgages portrayed as sound risks and packaged into ever more esoteric financial instruments,...

Finance More: Economy Wall Street Banks Earnings Here's How The Community Reinvestment Act Led To The Housing Bubble's Lax Lending John Carney Jun. 27, 2009, 9:33 AM 103,381 53 Earlier this week I noted that I had changed my mind on the Community Reinvestment Act. Contrary to my initial conclusion, the evidence is overwhelming that the CRA played a significant role in creating lax lending standards that fueled the housing bubble. Once I realized this, I had to abandon my suspicion that the anti-CRA case was a figment of the rhetoric of Republicans attempting to distract attention from their own...

In 2004, the new president told risk managers in San Francisco that closer supervision had "made our financial system far more resilient to shocks." In Phoenix that year, she reported "more positive signs in the economy." She flagged real estate as a concern in March 2005, telling a banking group in Hawaii that her staff was examining commercial lending and was concerned about the "easing of credit standards and terms on loans" for home mortgages. But Yellen ended optimistically, concluding that "we don't think widespread problems are likely" and that "industry conditions in many respects are stronger now than they've...

As President Obama and Congress discuss housing finance reform, we have to discuss the government mortgage guarantee. You know, the one that Fannie Mae and Freddie Mac furiously denied, but it turned out that they were wrong. Since 2008, Fannie Mae, Freddie Mac and the FHA control over 90% of the mortgage market and The Fed has taken unprecedented measures to keep mortgage rates low. Finally, investors are flocking into housing again. Part of the allure is the government mortgage guarantee. Government loves guarantees (and pseudo-guarantees) in the form of social safety nets. Social security, Medicare and other entitlements (that...

There’s something macabre about an imminent train wreck, you know exactly what is coming but you can’t help but watching. Now imagine that instead of watching that train wreck from atop a building a safe distance away, you’re standing right between the train and the tanker truck that has stalled on the tracks. That’s a different story all together. At that point, rather than being a mere fascination it’s a matter of life or death. You’ve seen the damage a train wreck can do. That’s why it was fascinating in the first place. The difference now of courses is that...

It was a historic moment at the U.S. Supreme Court on Wednesday as the justices heard a challenge to the 1965 Voting Rights Act. The landmark law spurred exponential growth in minority voting and is credited with getting many more minorities elected to office. But opponents say its time has passed, and the court's five conservative justices voiced strong doubts about the law's ongoing validity.

Bartiromo Takes Frank to Task Over Lack of ’08 Financial Crisis Prosecutions • Frank: 'Individuals' should be prosecuted on Wall Street, will not say who Former Massachusetts Congressman Barney Frank (D., Mass.) advocated criminal prosecutions against “individuals” involved in the 2008 financial crisis and the subsequent collapse on Wall Street Friday on CNBC. Maria Bartiromo reacted incredulously to Frank’s refusal to name specific individuals who may have perpetrated criminal wrongdoing, accusing the former Congressman of playing populist politics by making specious allegations against the financial industry. Frank attempted to deflect the criticism by stating as Chair of House Financial Services...

The Consumer Financial Protection Bureau (CFPB), built by Senator Elizabeth Warren (D-MA) and run by “Robo Cop” Richard Cordray (the former Attorney General of Ohio), has issued its new list of mortgage feature bans for the “qualified mortgage.” Kerri Ann Panchuk from Housing Wire has a nice summary in her article. 201301_cfpb_ability-to-repay-factsheet Here are the features of Qualified Mortgages and what is banned: • No excess upfront points and fees • No toxic loan features o No interest-only loans, o No loans where the principal amount increases, such as a negative-amortization loan; and o No loans where the term is...

In his early activist days, Barack Obama the community organizer sued banks to ease lending practices... During his time as a community organizer Barack Obama led several protests against banks to make loans to high risk individuals. ... A new study by the respected National Bureau of Economic Research found that Democrats are to blame for the subprime mortgage crisis. ... Republicans warned Democrats of the impending doom in 2004.

A new study from the widely respected National Bureau of Economic Research released this week has confirmed beyond question that the left's race-baiting attacks on the housing market (the Community Reinvestment Act

Housing Crisis: Previously unpublished court documents reveal that as a young lawyer from Chicago, President Obama's lawsuit against big banks started inflating the housing bubble that created the mess he says he inherited. We have often written that the true roots of our current economic crisis lay in the excesses of the 1977 Community Reinvestment Act as redefined under the Clinton administration. We have explained how community outreach by banks, under pressure from groups such as Acorn, was transformed into the mandatory credit issuance based not of creditworthiness, but on the basis of "fairness." "Redlining," the activists argued, was the...

Do you remember that thing about how the banks wouldn't lend to blacks and Hispanics because they were racists? And do you remember how they passed the Community Reinvestment Act so that banks were forced to reduce down payments practically to zero and lend to a lot of people they knew were bad credit risks? And do you remember how Wall Street bundled all these risky subprime mortgage and sold them to investors around the world so that when it became clear that those people weren't going to be able to pay their mortgages banks everywhere were left holding the...

After edging out Rockefeller 51% to 49% in the winner-take-all race in California, Goldwater had a huge majority of delegates, enough to easily win the nomination at the Republican convention. George Romney set about denouncing Goldwater, and even raised a stink at the convention to have Goldwater′s delegates disqualified. Romney was accusing many of Goldwater′s delegates as being everything from racists, members of the Ku-Klux-Klan, the John Birch Society and even accused some of being Communists! Imagine that! Once Goldwater was named the presidential nominee, George Romney still worked to undermine his campaign, refusing to endorse or support him. So...

You mention toxic mortgages. How does Dodd-Frank address that problem?Not at all. There is no attempt in Dodd-Frank to address the key problem of government subsidization of mortgage risk, and the exposures of Fannie Mae [FNMA], Freddie Mac [FMCC], and the Federal Housing Administration are still growing. How do you explain the omission?There is a powerful political interest that wants real-estate lending to be sponsored by the government. Starting about 1830, an important influence on the politics of banking came from farming interests, which increasingly promoted bank exposure to farm real-estate risk. What has changed since World War II is...

Dear Concerned American: The Obama bureaucracy is out of control, and I need your help to stop it. The Congressional Review Act (CRA) allows Congress to overturn outrageous regulations like the bureaucratic power grabs rammed through the Obama Labor Board. S.J. Res. 36 is a Joint Resolution of Disapproval that would prevent implementation of the NLRB's "ambush" election rules. You see, this proposal would diminish employees' ability to make a fully informed decision by reducing time in which the process occurs from the current average of 38 days to as little as one week. Worse, allowing the new rules will...

Journalism: Bloomberg News has published a piece designed to shame GOP White House hopefuls for fingering government housing policy in the crisis. But it's Bloomberg that needs schooling. Its lengthy article scoffs at top Republican candidates Mitt Romney and Newt Gingrich for laying much of the blame on federal regulations. It argues their view "has been rejected" by the Washington punditry, as well as the Democrat-appointed "commission that investigated the meltdown." While true, the prevailing wisdom is dead wrong. And the business wire not only parroted this false Democrat narrative, but conveniently omitted key facts. Take Bloomberg's analysis of the...

President Obama says the Occupy Wall Street protests show a "broad-based frustration" among Americans with the financial sector, which continues to kick against regulatory reforms three years after the financial crisis. "You're seeing some of the same folks who acted irresponsibly trying to fight efforts to crack down on the abusive practices that got us into this in the first place," he complained earlier this month. But what if government encouraged, even invented, those "abusive practices"?

Historians know that they can never claim wars start with a clash of armies. They know that the root causes of war start long before. In the same way that the seeds of war germinate well in advance of battle action, so too did the causes of this country’s mortgage meltdown, housing collapse, and credit crisis. Champions of Big-Brother-Government want you to blame everyone else except government intrusion for the economic plagues that currently assail us. But there’s no getting around the truth. In the 1990s and 2000s, activist leftist groups like ACORN, AFL-CIO, and NEA conspired with liberal politicians...

I guess every few years, civilized society has to put up with some new crop of ignoramuses who want to tear things down and rant against things they do not comprehend. No matter what the “Occupy Wall Street” lost-souls think, for those readers who really want the truth, this column’s for you. It is the first in a series. It’s the American way for people to stand on street corners with placards or bullhorns. But with the current bunch, the real question for mainstream Americans is whether the cries of the protestors are based on facts or contrived fiction. We’ll...