Obama '08?

Quote:

Another crucial point about this also, ican, CRA was not just about buyers, it was about properties. It encouraged loans for high risk properties, which essentially had the same outcome as loans to high risk buyers.

100% untrue. Perhaps you could link to the part of the CRA which encouraged loans for 'high risk' properties, specifically.

Cycloptichorn

I guess you are saying that you are an Obama democrat, part of the problem and not part of the solution.

I do not know what factors they used to redline neighborhoods, but I doubt it was done based upon race

You have brought up yourself the issue of redlining, which was a practice of loan companies identifying neighborhoods of high risk properties that they thought unwise to invest into. Now you are denying it.

I do not know what factors they used to redline neighborhoods, but I doubt it was done based upon race. I would at least doubt it until proven otherwise.

Redlining is the practice of denying, or increasing the cost of, services such as banking, insurance, access to jobs,[2] access to health care,[3] or even supermarkets[4] to residents in certain, often racially determined,[5] areas. The term "redlining" was coined in the late 1960s by John McKnight, a Northwestern University sociologist and community activist.[6] It describes the practice of marking a red line on a map to delineate the area where banks would not invest; later the term was applied to discrimination against a particular group of people (usually by race or sex) no matter the geography. During the heyday of redlining, the areas most frequently discriminated against were black inner city neighborhoods. Through at least the 1990s this practice meant that banks would often lend to lower income whites but not to middle or upper income blacks.[7]

The first series, published May 1-4, 1998, disclosed that Atlanta's banks and savings and loan institutions, although they had made loans for years in even the poorest white neighborhoods of Atlanta, did not lend in middle-class or more affluent black neighborhoods. The focus moved to lenders across the nation with the January 1989 article, "Blacks turned down for home loans from S&Ls twice as often as whites."

As a result of the stories, the federal Home Mortgage Disclosure Act was expanded to provide more information to the public on the pattern of activity by all mortgage lenders.

I suspect that the reality involved a little of what you asserted and some racism as well. However, you do raise an excellent point. Namely that in the philopsophic world of affirmative action, any conclusion anyone reaches on almost any issue that serves to harm the interests of "protected" minorities is deemed to be racism, no matter how unrelated the criteria and motives of those involved may have been with respect to race.

Since your "proof" consists of an arbitrary definition of a (then) new bit of terminology, you will of course admit the possibility that what many of the bankers were really doing before the CRA was avoiding making loans whose collateral was property in neighborhoods where values were expected to decline.

History

Although in the United States informal discrimination and segregation have always existed, the practice called "redlining" began with the National Housing Act of 1934, which established the Federal Housing Administration (FHA).[8] The federal government contributed to the early decay of inner city neighborhoods by withholding mortgage capital and making it difficult for these neighborhoods to attract and retain families able to purchase homes.[9] In 1935, the Federal Home Loan Bank Board (FHLBB) asked Home Owners' Loan Corporation (HOLC) to look at 239 cities and create "residential security maps" to indicate the level of security for real-estate investments in each surveyed city. Such maps defined many minority neighborhoods in cities as ineligible to receive financing. The maps were based on assumptions about the community, not accurate assessments of an individual's or household's ability to satisfy standard lending criteria. Since African-Americans were unwelcome in white neighborhoods, which frequently instituted racial restrictive covenants to keep them out, the policy effectively meant that blacks could not secure mortgage loans at all. At various times the practice also affected other ethnic groups, including Latinos, Asians, and Jews. The assumptions in redlining resulted in a large increase in residential racial segregation and urban decay in the United States. Urban planning historians theorize that the maps were used by private and public entities for years afterwards to deny loans to people in black communities.[8] However, recent research has indicated that the HOLC did not redline in its own lending activities, and that the racist language reflected the bias of the private sector and experts hired to conduct the appraisals.[10]

On the maps, the newest areas — those considered desirable for lending purposes — were outlined in blue and known as "Type A". These were typically affluent suburbs on the outskirts of cities. "Type B" neighborhoods were considered "Still Desirable", whereas older "Type C" were labeled "Declining" and outlined in yellow. "Type D" neighborhoods were outlined in red and were considered the most risky for mortgage support. These neighborhoods tended to be the older districts in the center of cities; often they were also black neighborhoods.[8]

Some redlined maps were also created by private organizations, such as J.M. Brewer's 1934 map of Philadelphia. Private organizations created maps designed to meet the requirements of the Federal Housing Administration's underwriting manual. The lenders had to consider FHA standards if they wanted to receive FHA insurance for their loans. FHA appraisal manuals instructed banks to steer clear of areas with "inharmonious racial groups" and recommended that municipalities enact racially restrictive zoning ordinances, as well as covenants prohibiting black owners.[11][12]

[Except that clearly wasn't the case; they loaned into neighborhoods full of white folks where values were expected to drop all the time. And they avoided affluent Black neighborhoods were the values WEREN'T dropping. Investigations revealed a clear pattern of banks doing this across the nation. It led to legislative action on the issue.

Cycloptichron

Just to be clear, the FHA instructed banks to discriminate. Let's not pretend that's not exactly what was going on, George, by using some weak dodge about not knowing motives.

Cycloptichron

You haven't offered any proof that, "the FHA (literally) instructed banks to discriminate..."

Wickopedia is well-known to be biased in many of its inputs and it is by no means an authoratative source for matters involving so much interpretation.

GWB did absolutely nothing and did not enforce any regulate. He even wanted to skuttle what regulation there was.

BUSH’S EFFORTS TO SOLVE FANNIE AND FREDDIE PROBLEM
2007
*06/23—Two Bear Sterns hedge fund groups collapse due to their mortgage investments.
*08/09— President Bush requests Congress pass a reform package for Fannie Mae and Freddie Mac.
*12/06— President Bush warns Congress of need to pass legislation reforming GSEs.

2008
*03/14—J.P. Morgan and the Federal Reserve recognize extent of Bear’s toxic assets, including sub-prime mortgages, and credit default swaps, and interconnection with other banks.
*03/14—At Economic Club of New York, President Bush requests Congress take action and reform Fannie Mae and Freddie Mac.
*04/14—President Bush issues a plea to Congress to pass legislation reforming Fannie Mae and Freddie Mac.
*05/03—President Bush issues a plea to Congress to pass legislation reforming Fannie Mae and Freddie Mac.
*05/19—President Bush issues a plea to Congress to pass legislation reforming Fannie Mae and Freddie Mac.
*05/31—President Bush issues a plea to Congress to pass legislation reforming Fannie Mae and Freddie Mac.
*06/06—President Bush issues a plea to Congress to pass legislation reforming Fannie Mae and Freddie Mac.
*07/11—Senator Chris Dodd says: "There’s sort of a panic going on today, and that’s not what ought to be. The facts don’t warrant that reaction, in my opinion … Fannie Mae and Freddie Mac were never bottom feeders in the residential mortgage market. People ought to feel comfortable about that. "

Most democrats no longer want to see Obama re-elected
in 2012, they want a better democrat... who can blame them.

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