"How The Banks Destroyed the Black Middle-Class" - Why the 1% Issue Matters

[tomm2thumbs]

"If we break up the banks, will that end racism and sexism?"---Hillary Clinton


Black and Latino minorities have been disproportionately targeted and affected by subprime loans. In California, one-eighth of all residences, or 702,000 homes, are in foreclosure. Black and Latino families make up more than half that number. Latino and African-American borrowers in California, according to figures from the Center for Responsible Lending, have foreclosure rates 2.3 and 1.9 times that of non-Hispanic white families. <snip>

One former Wells Fargo loan officer testifying in a lawsuit filed by the city of Baltimore against the bank says fellow employers routinely referred to subprime loans as “ghetto loans” and black people as “mud people.” He says he was reprimanded for not pushing higher priced loans to black borrowers who qualified for prime or cheaper loans. Another loan officer, Beth Jacobson, says the black community was seen “as fertile ground for subprime mortgages, as working-class blacks were hungry to be a part of the nation’s home-owning mania.”

“We just went right after them,” Jacobson said, according to the New York Times, adding that the black church was frequently targeted as the bank believed church leaders could convince their congregations to take out loans. <snip>

“After inflicting harm on neighborhoods of color through years of problematic subprime and option ARM loans, banks are now pulling back at a time when communities are most in need of responsible loans and investment,” said Geoff Smith, senior vice president of the Woodstock Institute. Believe it or not, no one in a position of power to stop all this from unfolding was blindsided. Ben Bernanke was warned years ago about the long-term implications of the real estate bubble and subprime lending. Still, he set idly by. He told the advocates who warned him that the market would work it all out. Perhaps they thought the fallout would be limited to minority communities, or perhaps they just didn’t care.


worth a read
LINK TO FULL 2010 ARTICLE

[grasswire]

1. what does Hillary have to say about this? nt

[Recursion]

2. Probably that "breaking up banks" (whatever that actually means) wouldn't fix this?

I'm never sure what Sanders means when he says that, to begin with, but banks will exploit vulnerable populations whether they're "broken up" or not.

[davidn3600]

3. Accountability is what was needed

When a business makes bad decisions, it crashes. The management is fired. When a business breaks the law, the management goes to jail and/or the business is penalized. That is what is supposed to happen.

None of this happened in the real estate collapse. Instead, the government bailed these bankers out. They kept their millions, stayed out of jail, and many even kept their jobs. Why? Because the government feared that the collapse would lead to a depression.

So what fear do banks have today? The management knows there really are no consequences. Executives and stockholders know the government will bail out any big losses. You can violate the law and no one will go to jail. There is no accountability. They are "too big to fail."

[Recursion]

4. What are you talking about? 3 out of the 5 big investment banks don't exist anymore

In 2007 there was Salomon/Smith Barney, Merril Lynch, Bear Stearns, Morgan Stanley, and Goldman Sachs. Only Morgan Stanley and Goldman Sachs still exist. Investment banks failed like it was cool in 2009.

[snot]

5. Basically, right; only it's worse.

Who cares what happened to particular corps.; the impt. thing is, how did the individuals in control fare? Pretty well, I'm thinking , . . . .

[raouldukelives]

6. As usual, they profit until the lack of oversight and graft inherent in the system

Causes it to collapse. By then, of course, they are on to the next scam.

That is why Bernie scares them so much. That next scam is all set to go, and the players in the know are salivating at another round of fleecing the least among us. Heck, I'd imagine the cocaine and champagne is already ordered for the coronation.

The last thing they want now is somebody willing to put the needs of the American people above the needs of the 1%.