And given that they'd be viewed as being discriminatory...(Think the left wouldn't so label them, as when CRA was first written? You know better...) at what cost in terms of image, and thereby what overall cost to the busienss?

Well now that's a PR problem, not a legal problem. They could spin it as "protecting the poor" if they were creative.

'Encoruaged' at the point of a discrimination lawsuit?

Come on. You're just ducking, now. As soon as they were enabled, they were forced to act that way, or have large numbers of lawsuits headed their way.

Then they should have taken it to court first and argued that there was no way to fulfill it's requirement.

Come on. You're just ducking, now. As soon as they were enabled, they were forced to act that way, or have large numbers of lawsuits headed their way.

(Shrug) You're not looking.

Well, I am kinda busy this week. But I notice that you have not been able, amongst all your typing, to produce a single sentence that documents how lenders were forced to make loans they knew would fail. Were feds holding guns to the heads of the lenders while they wrote the loans?

Forced is a strong word. Encouraged, enabled, that is one thing, forced is quite another. But this is hardly the first thing you have not been able to produce facts to support your arguments now, is it?

I suggest a serious look at CRA and it's ramifications before proceding.

That's because you're operating under the illusion that there was no business reason to redline certain areas of town.... reasons that were not at all racist.

No, thats because I am still not seeing an actual mechanism for "forcing". How were lenders "forced"
Under what penalty? Would they be taken to jail if they did not make these loans? You need to support your charge with something beyond vague statements...

What I am not seeing is the element of the government forcing lenders to make loans that were doomed to failure.

That's because you're operating under the illusion that there was no business reason to redline certain areas of town.... reasons that were not at all racist.

It seems more like the government opened the door and the lenders happily went through it, making a great deal of money in the process...

Anjin-san,
I don't believe Bit has blamed liberals for HUD's decisions, so you're being prematurely defensive there. Also, blaming the Executive branch doesn't prove Bit wrong, it in fact supports his argument that HUD is at fault.

This discussion goes back over several threads...

Yes, but wouldn't you agree that this scenario falls under the category of "unintended consequences"?

Most disasters do fall into that line... or any accident for that matter where safety guidlines are ignored for one expediency or another.

I should have mentioned that a fair amount of sub-prime loans... something on the order of 35-36% if I remember rightly, that are curretly out, are in the ahnds of real-estate speculators. That said, I can't find how the failures from each group of sub-prime borrowers breaks down, just now, and I'd be interested to see it... and the trends of each over time... IOW, what was the trigger?

I wonder, however, how many of the sub-prime loans which have gone belly-up, were issued over the objections of their credit record and other traditional qualifications for loans, simply because of their minority status?

Yes, but wouldn't you agree that this scenario falls under the category of "unintended consequences"? HUD didn't say to give minorities sub-prime loans, it just failed to anticipate that this route was the easiest way lenders could reach HUD's official goal of increasing minority home ownership.

(Background, check this)

Also, while those I quoted mentioned race or ethnicity as an issue, race aqnd ethnicity are not the point. The point is that the people being loaned money to, simply were not qualified to take on loans. They were given loans so as to be seen as an 'Equal Opportunity Lender". It seems from a statistical POV fair enough to suggest that there were and are more minorities unqaulified for loans on a percentage basis than there are for other groups. the rates of Black home ownership, as an example is now listed at being around 49%. That's quite an increase since even the 1980s, which saw black home ownership skyrocketing. I like the way that's going, don't misunderstand me.

I wonder, however, how many of the sub-prime loans which have gone belly-up, were issued over the objections of their credit record and other traditional qualifications for loans, simply because of their minority status?

A loss on a bad loan, after all, is cheaper in the short run, than a discrimination lawsuit. That alone, even absent new laws will certainly create the conditions we have now.

Add to that, laws such as the Community Reinvestment Act, passed originally back in 77, (democrat congress, Jimmy Carter White House) and amended in 1995 (Clinton). It was these amendments to the CRA which created most of the trouble we have now, by allowing sub-primes to be secularized. That, in combo with the other factors I mentioned, created our current situation.

Are you getting all of this?

Here's what you've stated, please correct me if I'm wrong:

1.) There was in increase in subprime loans between 1997 and 2000

2.) HUD encouraged increasing home ownership by minorities.

3.) Lenders targeting subprime loans minorities at minorities more than they did to whites.

Okay, I'm with you so far. But what I'm missing is the piece that links #2 as a cause of #3, to get:

4.) The government demanded that lenders give out subprime loans.