question for the libs on here

[FMCoug]

True or False.

Congress forcing the mortgage industry to make homeownership "affordable" for all led directly to the issue at hand? Not to mention redlining ....

FHA loans for those with 3% down and good credit have existed for a long time. But that wasn't good enough.

[MikeWaters]

you could have just sent PMs to Cali and Ma'ake.

[FMCoug]

you could have just sent PMs to Cali and Ma'ake.

Funny, I was thinking of you, the #1 board advocate for the downtrodden.

[MikeWaters]

I'm a conservative.

[Indy Coug]

I'm a conservative.

As evidenced by what?

[Levin]

As evidenced by what?

Think Edmund Burke and not George Bush.

[FMCoug]

I'm a conservative.

State your agreement with THIS, and I might believe you:

http://www.cougarboard.com/noframes/message.html?id=4064549

[FMCoug]

State your agreement with THIS, and I might believe you:

http://www.cougarboard.com/noframes/message.html?id=4064549

That's what I thought. Instead, you probably think that thread makes me a racist.

[Clark Addison]

That's what I thought. Instead, you probably think that thread makes me a racist.

Are you seriously defending redlining? I'm not calling you a racist; I'm trying to confirm what you mean in that post.

[FMCoug]

Are you seriously defending redlining?

Yep. The market is not racist. If there was money to be made in redlined areas, they would not have been redlined.

[Tex]

That's what I thought. Instead, you probably think that thread makes me a racist.

7s3WOQV-lHQ

[Clark Addison]

Yep. The market is not racist. If there was money to be made in redlined areas, they would not have been redlined.

That is just absolutely not true. What are you basing that statement on? The market is not racist, but people certainly can be. It is only within the last 15 years or so that predictive modeling became the predominant method of determining credit worthiness. Before that time, almost all of the decisions were made by people, who had their own predjudices. Even today, in many industries and companies, a lot of loan underwriting is done by people's judgements, which leads to a whole ot of inefficiencies.

I don't mean this as a rude question, I am just trying to get where you are coming from. Do you have a history in consumer lending?

[MikeWaters]

Is it a market inefficiency for a company to have a policy not to hire niggers, FM?

[Clark Addison]

FM, while you are (maybe) replying to my other posts, here are some related thoughts. I am a strong believer in the power of free markets, but we have plenty of examples where they have not fixed racial problems:

- Most economists I have read agree that slavery in the antebellum South was not economically sound (it would have been more efficient to pay workers). Why did it continue?

- It certainly would have been more profitable for businesses during the Jim Crow area to serve all people, regardless of their color, yet they didn't. Why did the market not fix that?

- In the specific case of redlining, why did poor white areas not get redlined nearly as much as comparable black areas? I'll tell you right now, it was not because they paid their loans better.

[FMCoug]

Is it a market inefficiency for a company to have a policy not to hire niggers, FM?

your race baiting is true to form. That has nothing to do with the discussion at hand and you know it.

[MikeWaters]

your race baiting is true to form. That has nothing to do with the discussion at hand and you know it.

Bullshit. If a bank has a policy to not give loans to any black person or black-owned business, is that a good thing? Is that ok?

I used to be of the opinion that a business could do whatever it wanted. If it wanted to hang a sign out front "NO COLOREDS", that was ok. Not hire minorities? Ok. No mortgages to blacks? Ok. I argued the market would take care of it. I'm not of the same opinion anymore.

[FMCoug]

In the specific case of redlining, why did poor white areas not get redlined nearly as much as comparable black areas? I'll tell you right now, it was not because they paid their loans better.

I'd love to see data to substantiate that.

But before we gett to far afield into redlining, the premise of my post is that the government forcing banks to make risky loans is what started this. Agree or not?

[FMCoug]

Bullshit. If a bank has a policy to not give loans to any black person or black-owned business, is that a good thing? Is that ok?

Of course not. That is a racist view. But if socioeconomic data says zipcode X is a high risk place to lend money, regardless of cause, is that racist? So what if it HAPPENS to be a pre-dominantly black area?

[MikeWaters]

Of course not. That is a racist view. But if socioeconomic data says zipcode X is a high risk place to lend money, regardless of cause, is that racist? So what if it HAPPENS to be a pre-dominantly black area?

Yes it is, because any model that only uses location is a DUMB model.

[FMCoug]

Yes it is, because any model that only uses location is a DUMB model.

So you think banks should be required to make loans in say ... Fair Park?

Even though it's a war zone full of crack houses, etc.?

[Clark Addison]

I'd love to see data to substantiate that.

But before we gett to far afield into redlining, the premise of my post is that the government forcing banks to make risky loans is what started this. Agree or not?


I'm not smart enough to say what exactly the cause of all of this is, but I am also not dumb enough to lay all the blame on one thing. I've worked at Banks for about 8 years, all in consumer lending, and while the government gives us a lot of direction and regulations, they've never forced us to make bad loans. The marketing and sales people try to make us do that a lot more than the government.

My opinion is that the massive growth in the mortgage CDO market did a whole lot more to cause this than the government (and the fault that the government has is not in getting rid of redlining). Large investors (pushed by investment houses) created a huge demand for CDOs, the investment houses pushed that demand down to the consumer banks and mortgage brokers, who sold a bunch of loans to people who couldn't afford them (who are also not faultless in this). The brokers who made these loans were motivated much more, IMO, by the fact that they could make a lot of money selling them than they were by the government hoding a gun to their heads.

[MikeWaters]

So you think banks should be required to make loans in say ... Fair Park?

Even though it's a war zone full of crack houses, etc.?

I think there are some investors around Fair Park who are going to get very, very rich.

Being sort of hickish and definitely not urban, you've never actually witnessed urban renewal.

[FMCoug]

I think there are some investors around Fair Park who are going to get very, very rich.

Good for them. If they are doing it with their own money. Just don't tell me that I have to pay for it.

[MikeWaters]

Good for them. If they are doing it with their own money. Just don't tell me that I have to pay for it.

because you are a bank, and have redlined all the "black" areas?

[FMCoug]

because you are a bank, and have redlined all the "black" areas?

As we are seeing over the past few weeks, you don't have to be the bank to have to pay for the mess.

And you continue to race bait. I NEVER said anything about "black" areas. I said that private businesses should be able to choose areas to lend in or not based on real socioeconomic data. If those areas happen to be predominantly black, that is irrelevant.

[MikeWaters]

As we are seeing over the past few weeks, you don't have to be the bank to have to pay for the mess.

And you continue to race bait. I NEVER said anything about "black" areas. I said that private businesses should be able to choose areas to lend in or not based on real socioeconomic data. If those areas happen to be predominantly black, that is irrelevant.

choose based on socioeconomic data, meaning hey, if the area has a lot of kids getting free lunch at school, no loans? Or if the data says that the zip code is only 5% white, no loans?

Is that what you are advocating? Do you think these banks exist in a vacuum, getting no benefit from the govt. and the fed?

[FMCoug]

choose based on socioeconomic data, meaning hey, if the area has a lot of kids getting free lunch at school, no loans? Or if the data says that the zip code is only 5% white, no loans?

Is that what you are advocating? Do you think these banks exist in a vacuum, getting no benefit from the govt. and the fed?

You can't help but bring race into this can you? To your first point, it would not be unreasonable to consider those who can't afford to feed their families higher risk. The 2nd point is completely irrelevant.

How about data that says foreclosures are 50% higher in the area. Or that 50% of homeowners are behind in their payments. Or that crime is astronomical so responsible people don't want to live there? All valid factors IMO.

[MikeWaters]

You can't help but bring race into this can you? To your first point, it would not be unreasonable to consider those who can't afford to feed their families higher risk. The 2nd point is completely irrelevant.

How about data that says foreclosures are 50% higher in the area. Or that 50% of homeowners are behind in their payments. Or that crime is astronomical so responsible people don't want to live there? All valid factors IMO.

you never 1) answered what your experience in the area is 2) explained what you know of predictive modeling in consumer loans 3) nor have you provided any evidence that your approach, widely acknowledged as racist, is good business.

Yeah, you can get away with espousing these views in the church. But try going around to other places, and get away with saying "there is no racism in redlining."

Maybe you can get SU to argue for you. He seems to live fascism these days.

[FMCoug]

you never 1) answered what your experience in the area is 2) explained what you know of predictive modeling in consumer loans 3) nor have you provided any evidence that your approach, widely acknowledged as racist, is good business.

Yeah, you can get away with espousing these views in the church. But try going around to other places, and get away with saying "there is no racism in redlining."

Maybe you can get SU to argue for you. He seems to live fascism these days.


It' not in home loans per se, but I built a model a few years ago that dealt with assigning credit ratings to thos who receive collect calls from correctional facilities (I'm not kidding). Not surprisingly, demographic data including location was a big part of that model. It resulted in reducing bad debt by over 40% and there is a patent on it. Good enough?

Which part of your grant-unded research has to do with this, IT, or any other host of things you think you seem to think you know all about?

[MikeWaters]

Answers to #1 and #2. It' not in home loans per se, but I built a model a few years ago that dealt with assigning credit ratings to thos who receive collect calls from correctional facilities (I'm not kidding). Not surprisingly, demographic data including location was a big part of that model. It resulted in reducing bad debt by over 40% and there is a patent on it. Good enough?

Which part of your psychology research has to do with this, IT, or any other host of things you think you know all about on this board?

As to #3, my point was that forcing "affordable housing loans" on the banks is what created the sub-prime market.

even in your "perfect" example, you say location was a "big" part of it, meaning that in no way was it all of it, and a model that only used location was not nearly as robust as a model that used location and many other factors.

I hope it's not too insulting for me to interpret your own work for you.

[FMCoug]

even in your "perfect" example, you say location was a "big" part of it, meaning that in no way was it all of it, and a model that only used location was not nearly as robust as a model that used location and many other factors.

I hope it's not too insulting for me to interpret your own work for you.


I have never said location should be the ONLY criteria.

[fusnik11]

I love it.

For 6 years all major decisions in this country were decided by one party.

They claim the economy we enjoyed for 8 years during Clinton's years were because of Reagan. They claim the rough start to this decade was because of Clinton and his inability to reel in the tech bubble. And now ya'll are blaming the market correction, credit crunch, and subprime woes, of the past 12 months on the Dems who less than 2 years ago took control.

[MikeWaters]

I have never said location should be the ONLY criteria.

Oh, I'm sorry. I thought you meant to say that a bank ought to be able to have a policy not to give loans in a certain zip code or neighborhood.

I didn't realize you were against redlining. You sneaky dog.