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Date Posted: 20:39:34 10/13/11 Thu
Author: bill
Author Host/IP: 68.162.47.66
Subject: Re: Arthur, here is something else you may want to consider..Racial predatory loans fueled U.S. housing crisis: study
In reply to: arthur 's message, "Re: Arthur, here is something else you may want to consider..Racial predatory loans fueled U.S. housing crisis: study" on 19:54:36 10/13/11 Thu

The majority of sub prime mortgages and loans used to go to business interests where high risk dictates the class of the oan and the high rates of interest that come with high risk .

In private real estate most sub prime mortgages go to people who do have the abillity to pay the freight but not the downpayment a lesser rate loan would require.
More risk higher interest and economically depressed areas usually mean high risk loans of whatever kind are the rule.
True there were higher interest rates for most people in ethnic enclaves mainly because the economic situation is so poor and most residents do not make high salaries but rather are hourly wage earners or even part time employees eveen if the hold two or even more jobs.
Major banks usually avoided those economically depressed areas until forced to offer loans there by government order.
Simple economics that unfortuneately hits certain parts of the population harder than others. all of the " ghettos " get the same treatment no matter if they are ethnic or racially predominant with a specific cultural segment of the population.
Not saying that the banks were being equal oportunity lenders bedause that would be a lie . they focus on those who can afford to repay a loan.
that is why the old addage applies that if you don't need a loan you can get one but if you do need one you don't have enough assets to afford one ( hence the subprime loan with the high interest for high risk ).
Now a lot of people with money also took out sub prime loans for second homes and other things but most of them either could afford them or had enough cash flow to renegotiate if necessary.

My personal opinion is that on the face of it there is descrimination against certain parts of the populatiuon there is also enough factual information to say that it was not racially motivated just as there is enough to say it was.

Would we all like to see these practices go away ? Of course we would ( unless we are unscrupulous lenders ).

b

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