In the early 90's there was a real push for banks and other financial institutions to serve the inner city... mostly minority....market and to stop using the practice of "red lining," which was simply drawing a red line around areas that they would not make loans in.
Was this practice racist? Not in my mind. It was simply "business." The experience with loans within those areas said a rational business person wouldn't loan money in those areas. If you are a bank, loan shark or Freddie and Fannie... if the borrower defaults, you must recover your loss.
But the gov pushed and Freddie and Fannie promised to pay and new ways of financing came into play and "flipping" became the rage and everyone was happy..... except a few old malcontents... as evidenced by Bush in '03 and McCain in '05...
What had started off as a way to improve housing for a small number of marginally "poor minorities" spread because everyone was making money and getting bennie points for being "for the poor." And as the demand went up, the prices went up which meant that the "needs subprime loan" level went up and encompassed more people.
That McCain and Bush were right and Barney and Harry and Nancy and Hussein were wrong is not in question. The Demos created the problem and then refused to let it be regulated properly.
The road to hell is always paved with good intentions driven on by the car of greed and self service.
Now's the time for Hussein to shut up and admit that his side was wrong. That would be a "change," wouldn't it?
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This is what redlining is about:
ReplyDeleteThe most devastating form of redlining, and the most common use of the term, refers to mortgage discrimination, in which middle-income black and Hispanic residents are denied loans that are made available to lower-income whites. The term "redlining" was coined in the late 1960s by community activists in Chicago. 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 these areas were most frequently black inner city neighborhoods. Later, through at least the 1990s, this discrimination involved lending to lower-income whites, but not to middle- or upper-income blacks. (ref: Immergluck, Dedman.)
and
Dan Immergluck writes that in 2002 small businesses in black neighborhoods still received fewer loans, even after accounting for business density, business size, industrial mix, neighborhood income, and the credit quality of local businesses.[15] Gregory D. Squires wrote in 2003 that it is clear that race has long affected and continues to affect the policies and practices of the insurance industry.[16] Workers living in American inner cities have a harder time finding jobs than suburban workers.[17] Redlining has helped preserve segregated living patterns for blacks and whites in the United States, because discrimination motivated by prejudice is often contingent on the racial composition of neighborhoods where the loan is sought and the race of the applicant. Lending institutions have been shown to treat black mortgage applicants differently when they are buying homes in white neighborhoods than when buying homes in black neighborhoods.[18]
Yep, nothing wrong with redlining, it's an all-American practice..........