Subprime predatory practices.....

[ERCougar]

Originally Posted by BarbaraGordon

Apologies. Credit parity is addressed later in the paper.

There are any number of studies that have shown that even with other factors controlled, race and age are consistent determining factors in the type of financing offered by lenders.

I'm not trying to argue with you, but I honestly don't see how this would work. On every loan I've taken out, I've never met the actual lender--it's gone through a broker. I've never checked a race box anywhere. How do they know I'm white?

Assuming they meet the person and thus figure out their race, how does the scenario play out. Assuming the lender has some racist stereotype that black people don't pay back loans, are you telling me that instead of offering the prime loan, they instead offer some riskier ARM loan? It's not like they WANT the person to default--how on earth does that benefit them?

I just don't buy that this is widespread--the profit motive is just too strong.

[Brian]

Uneducated/uniformed/stupid people will always be taken advantage of.

Any "solution" to this "problem" will be worse than the original "problem".

[exUte]

Originally Posted by ERCougar

I'm not trying to argue with you, but I honestly don't see how this would work. On every loan I've taken out, I've never met the actual lender--it's gone through a broker. I've never checked a race box anywhere. How do they know I'm white?

Assuming they meet the person and thus figure out their race, how does the scenario play out. Assuming the lender has some racist stereotype that black people don't pay back loans, are you telling me that instead of offering the prime loan, they instead offer some riskier ARM loan? It's not like they WANT the person to default--how on earth does that benefit them?

I just don't buy that this is widespread--the profit motive is just too strong.

it's part of the victimization climate these days. I was too stupid and it's someone elses fault I was so stupid. And now I want the government to help me out of my stupid state.

[Solon]

Originally Posted by ERCougar

I'm not trying to argue with you, but I honestly don't see how this would work. On every loan I've taken out, I've never met the actual lender--it's gone through a broker. I've never checked a race box anywhere. How do they know I'm white?

Assuming they meet the person and thus figure out their race, how does the scenario play out. Assuming the lender has some racist stereotype that black people don't pay back loans, are you telling me that instead of offering the prime loan, they instead offer some riskier ARM loan? It's not like they WANT the person to default--how on earth does that benefit them?

I just don't buy that this is widespread--the profit motive is just too strong.

There are several sociological studies that use "white-sounding" names and "black-sounding" or "hispanic-sounding" names on similar/comparable applications for jobs, loans, etc. and they often conclude that racial assumptions might play a part - but it's tough to tell.

Baltimore is claiming that some banks offered different rates to customers of different races and is currently suing Wells Fargo for this type of thing, but I think you're right in wondering who's looking at the race - brokers, agents, big-wigs, or is it just a function of which zip-codes are more racially homogeneous?

http://www.nytimes.com/2008/01/08/us...in&oref=slogin

One of the biggest problems of "predatory" lending is brokers and real estate agents who lied to the borrowers (about repayment schedules, fees, etc). While I understand that there must be some accountability when you put your name on the paper, most bets are off if you've been fed a bunch of lies.

[ERCougar]

Originally Posted by Solon

There are several sociological studies that use "white-sounding" names and "black-sounding" or "hispanic-sounding" names on similar/comparable applications for jobs, loans, etc. and they often conclude that racial assumptions might play a part - but it's tough to tell.

Baltimore is claiming that some banks offered different rates to customers of different races and is currently suing Wells Fargo for this type of thing, but I think you're right in wondering who's looking at the race - brokers, agents, big-wigs, or is it just a function of which zip-codes are more racially homogeneous?

http://www.nytimes.com/2008/01/08/us...in&oref=slogin

One of the biggest problems of "predatory" lending is brokers and real estate agents who lied to the borrowers (about repayment schedules, fees, etc). While I understand that there must be some accountability when you put your name on the paper, most bets are off if you've been fed a bunch of lies.

I agree with you in that if people are lied to, or even deceived, that should be prosecuted under fraud legislation. But I'm not convinced the lending practice itself needs to be regulated.

Regarding your first point...
If I'm a lender and I have this suspicion that black people won't pay me back, and I know that ZIP code ***** is mostly black, no way am I going to try to make loans in that ZIP code. And I'm sure not going to make higher risk ARMS in that ZIP code. Or, to take it a step higher, I'm not going to buy loans that others have made to residents of that ZIP code.

I have no idea if you're right that black people don't get the same low interest rates that white people do. But we're discussing something different--i.e. were minorities targeted with LOWER interest rate loans that will catch them later, in some weird attempt to make them default (why they would want to do this, I have no idea). Or are you arguing that blacks were being lied to more frequently than whites? If so, why on earth did this happen? Who benefits?

Maybe I'm misunderstanding the whole argument here, but I just don't get it. If people were being lied to, different story--there should be prosecution and some government help. My experience tells me that greed, with an inability to see past next week, is the much more likely culprit.

[MikeWaters]

I was lied to by a LDS loan officer. He told me "no points" but then when the final paperwork came through, guess what, not true. But at that point, the timeframe was so tight, I was screwed. I had to go forward with the loan.

If this happened to me, I can imagine it happens to all kinds of people. Maybe I should look up what his name was and post it on the web.

[ERCougar]

Originally Posted by MikeWaters

I was lied to by a LDS loan officer. He told me "no points" but then when the final paperwork came through, guess what, not true. But at that point, the timeframe was so tight, I was screwed. I had to go forward with the loan.

If this happened to me, I can imagine it happens to all kinds of people. Maybe I should look up what his name was and post it on the web.

1st mistake--LDS loan officer.
2nd mistake--not demanding from your local politician that someone bail you out.
3rd mistake--being black (I've never met you, but you must be. This doesn't happen to white people)

But seriously--this is fraud, plain and simple. Not "predatory lending". I'm all for legislation that makes the terms more clear to people. But don't regulate the terms that can be offered.

[MikeWaters]

Originally Posted by ERCougar

1st mistake--LDS loan officer.
2nd mistake--not demanding from your local politician that someone bail you out.
3rd mistake--being black (I've never met you, but you must be. This doesn't happen to white people)

My parents recommended the moron.

[ERCougar]

Originally Posted by Brian

Uneducated/uniformed/stupid people will always be taken advantage of.

Any "solution" to this "problem" will be worse than the original "problem".

Well-put.

[MikeWaters]

Loan officers should not be able to hide the terms in complex contracts. The terms should be out-front, in plain English, on a form that is required by law.