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The Mortgage Crisis: Blame the Brown and Black People

Jill

Ann Coulter says that the mortgage crisis is caused by “affirmative action.” That is, efforts by the Clinton administration to prevent racial discrimination in lending led to a situation where:

Instead of looking at “outdated criteria,” such as the mortgage applicant’s credit history and ability to make a down payment, banks were encouraged to consider nontraditional measures of credit-worthiness, such as having a good jump shot or having a missing child named Caylee.”

Michelle Malkin blames “illegal immigrants,” a term she uses interchangeably with “Hispanics.”

And this is why we have the “assholes” tag.

36 thoughts on The Mortgage Crisis: Blame the Brown and Black People

  1. Wonder what Coulter squares her affirmative action theory with red-lining. Several banks have had to establish programs specifically because they were DISCRIMINATORY in lending, based on race.

  2. Wonder how Coulter squares her affirmative action theory with red-lining. Several banks have had to establish programs specifically because they were DISCRIMINATORY in lending, based on race.

  3. Wow. Talk about victim-blaming. Poor business practices and inflated loans led to this crisis, not people being poor or a minority.

  4. I simply loathe Malkin. I find it absolutely disgusting that minorities, who by the way exist with the least social power are being blamed for the mortgage crises. It certainly could not be the fault of the white greedy bankers seeking ever increasing profits now could it?

  7. Argh. You know what is really frustrating about all this? Although the media likes to post scary numbers like foreclosures jumping 20% in a month, the total fucking foreclosure rate on mortgages is still less than 2%.

    The figures I’m seeing are about on the order of 1/500 homes. While that’s still a lot of people in trouble, it’s not enough to trigger a global economic crisis on its own. The vast majority of people who have taken out mortgages in the last 20 years are making payments or payment arrangements on their mortgages.

    Bad credit management by homeowners is only a small part of the problem. The $700billion part of the problem came about because a group sketchy people went massively into debt trying to game the system. They borrowed massive quantities of money in short term loans. They Bought up mortgage loans, a long-term investment with low liquidity, and then tried to sell them by the hundreds as short-term liquid investments. And when the market caught up with them and said, “hey wait a minute, these packages are not as liquid, safe, or high-yield as claimed,” THEY defaulted.

    It’s not bad credit management by homeowners we should be examining. It’s bad credit management by investors.

  8. change the tag to: “banking policy”

    Can you point me to the part of that Times article where they said anything about basing lending policy on one’s jump-shot or missing child with a stereotypically Black name? Or the part where they talked about how Hispanics should be targeted for lending, because they’re one and the same as illegal immigrants?

  13. AlexanderBuinov: “What is factually incorrect with the assertions in Malkin’s referenced article?”

    Apparently you can’t read the obvious interchange of terms that Malkins used. She first accurately states that the mortgage blowout was largely among traditionally under represented persons in the home buyer’s market, among them “hispanics” as she calls our Latino brethren.

    She then leaps a paragraph or so down into a screed about illegal aliens and how they are taking over the world in southern cal and other areas close to the border.

    It takes an idiot or a racist to make the jump from “hispanic” to “illegal” because in the minds of most of her followers, the two terms are interchangeable, which is why she makes no effort to distinguish the link between the “hispanics” she speaks of who got bum mortgages and the “illegals” she speaks of later. The link is type of talk that racists and the ignorant (interchangeable there without need of explanation might I add), will make on their own. She I’m sure, is aware of this and this is of course intentional.

    Her only effort to make a link is to talk about a scandal in which some property flippers were caught using the names of illegals as ghost owners in their property flipping operations. No mention is made of whether the illegals shared any of the profits of these goons’ efforts, as I’m certain that as per usual, the “illegals” were duped just as well and quite ignorant of how they were being used.

    So there Alexander, her article (or screed more accurately) made several innuendos and dog whistle references to racism, intentionally skewed the facts by quoting only the points salacious to support her faulty logic. If you can’t see that, then I’m sorry, but you provide another example of the tragedy of underfunded public education.

  14. Malkin knows nothing about the “California Inland Empire” which is second or third in the country in foreclosures for different reasons than “illegal immigration”. What the central valleys of California also have in common is massive population explosions of people coming from coastal cities for what they believed was more affordable housing. Values went up sharply in the past few years in the I.E. and now people who had mortgages especially suspect ones are paying a large price b/c those values are falling.

    People in different economic strata have impacted by foreclosures as well and difficulty in selling homes. The foreclosure rate is lower in some poorer neighborhoods and predominantly Latino neighborhoods in part because homes remain in the family and aren’t sold. Some of these homes have been in the family for several generations going back to the times when racist housing laws prohibited African-Americans, Latinos and Chinese-Americans from living outside of specific neighborhoods in the city.

    If she makes blanket statements about the IE, she should at least visit this area before pulling something out of her arse to feed and sell her own bigotry.

  15. jz: I remember quite well all the conversation and news about loosening lending practices. I was in the construction industry, residential in fact and I received at least two calls a week from any number of white families who wanted us to make their three bedroom ranch house into a five bedroom McMansion because they qualified for an easy credit equity loan.

    So it wasn’t all minorities. Fact is that people were duped by the mortgage industry and mortgage brokers were combing the streets looking anyone and I mean anyone that they could get to sign onto a mortgage.

    I know this because they knocked on my door as well and I almost took a bite, but backed off at the last minute. Thank god. I’d be on the street as well.

    I manage a rental company and I don’t know how many people I’ve talked to who have foreclosed on or sold their condo or modest house NOT because they couldn’t have qualified for a mortgage, but because they were sweet-talked into believing that the world would only get better, economic prosperity was to never end and by next year they could refi and get better rates — before the contractural climb in rates would kick in.

    Call that naivete or ignorance all you like, but we live in a culture where people are told every friggin’ day by everyone from Oprah to motivational speakers on the radio to believe they can and it will come. “Positive thinking” and irrational exuberance have been the key lies fed to the American public. They are told consistently and constantly that taking risk is paramount to success and only losers hesitate.

    Mortgage brokers, mortgage traders, bankers, fund brokers and whatever all else, were the ones holding their noses knowing full well that the bubble would eventually burst. Their only drive was to make their money as quickly as possible and run like hell when the roof finally started to fall in.

    The brokers and the rest are standing at the gate of the government begging for a handout, with one foot still in their Bentleys while the average American once again, gets not only to foot the bill so the rich can keep up their lifestyle, but they get stuck wearing the blame as well.

    Typical thieves, not only will they steal from your blind aging mother, but they’ll blame her for not being able to see the theft to stop it.

    Anyone who defends these people is a fool or a thief themselves.

  16. kate:
    You’re not answering his question. He’s asking what is factually incorrect about bad loans to Hispanics causing or contributing to the subprime crisis. It has nothing to do with whether the article is racist or not.

  17. Jill opened her post with Malkins article and how she attempts to tie her “illegals are taking over the country and causing hell to break lose” with the mortgage “crises”.

    It has everything to do with Malkins assertions that stem from racism. Malkins intentionally excludes the fact that the faulty mortgages were made not only to spanish speaking peoples, but to all sorts of persons, of all sorts of color.

    What people like Malkin wish to overlook is that the bad loans were made to people who were duped into believing that 1) this was the only way they could purchase a house and 2) that the mortgage broker’s advice was not tainted with their own self interest and greed.

    Also, Malkins makes the assertion in the article, around which Jill made her post that the term “hispanic” and “illegal” are one and the same.

    The point frankly is why are the wingnut harpies focusing on minority groups exclusively as to blame for this whole debacle when in fact, whole numbers of groups were duped and also that the entire “crisis” has more to do with under regulation and unfettered greed than whether or not “hispanics” were given bum mortgages. Malkins is incorrect in asserting that the victims are to blame, that is what is incorrect.

  18. And while we’re on this, I’d like to know just exactly where Coulter found this direction among the banks:

    “banks were encouraged to consider nontraditional measures of credit-worthiness, such as having a good jump shot or having a missing child named “Caylee.”

    But I guess we can just chaulk that up to Coulter’s creative understanding of people of color, that allows her license to make such stretches of truth right? Its not really whether she intentionally uses racist stereotypes to drive home her point of legitimizing racism as the cause of all the evils of the country, since we know black people got bum loans too.

  19. Even in the I.E. many of the cites hit hard like those in the southern part of Riverside County were “White flight” cities anyway and they’re the ones where about 15-20% of the homes are in foreclosure. In related news, West Nile virus infection is also up, killing at least two people in this county b/c of all the “green” swimming pools.

    And what others said that Malkin’s relating “illegal immigrants” to “Hispanic”. Many mortgage lenders wanted to make a killing on the housing market before it burst as my mailbox was flooded with brochures and fliers advertising these businesses. But why attribute it to good old-fashioned greed when you can create scapegoats?

  20. Yeah if a couple of those banks had black CEO’s she’d be on the opposite side of the argument. Isn’t Coulter Canadian? Why does she give a rat’s ass about American politics?

  21. And, this debate about which homeowners are defaulting on their loans is a distraction anyway. Lets put this in perspective. Investors put billions of dollars into manufacturing, agricultural production, and natural resource extraction every year. When those investments fail to perform as expected, as they did at the end of the dot-com bubble, we have a slightly painful but healthy market correction.

    The core of this crisis is not families defaulting on the $200K mortgages they used to buy their home. It’s investors defaulting on $200million short-term loans they used to buy mortgages by the bundle. If we are going to point one finger at the homeowner who got in over her head on a mortgage, shouldn’t we also point a finger at the speculators who unwisely borrowed short-term credit for a long-term investment without any buffer for potential losses?

  22. Yes, because it’s so much easier to blame racial minorities and the “poor” (I’ve heard that one around the office) than it is to blame PHIL GRAMM (Gramm-Leach-Bliley? Anyone? Anyone?) and the Fed (or the other applicable banking regulators).

    And of course lawyers like me who helped set up some of the unregulated CDOs that are now failing. Of course for the non-regulation you can blame the 1939 Congress…but most of them are dead, so its somewhat unsatisfying.

    Note for Senator McCain: At no point was the SEC even permitted to be involved in this debacle. It was the Fed you freakin moron. How can you be POTUS if you don’t even know which agencies regulates banks?!?

  23. Pingback: This week in blaming poor people of color for poor economic policy. | Revolutionary Act

  25. Crap, I just wrote this whole post and lost it the first time around. I hope you all don’t mind my barging in on the conversation. I’ve been a lurker for months and can’t seem to hold my tongue any longer. I love this damn site.

    There is a question regarding what is factually incorrect…let me see now…Oh I got it, the fact that there is still use of ‘Hispanic’ in 2008. Try looking up Latino/as and Chicano/as especially in region/location specific and see if that would help answer some of the discrepancy. Also, in some areas, we are not considered the ‘minority.’ I don’t really fancy that term much, and find that it can also be used to discriminate and lump people into a negative category (as we all know).

    Malkin needs intellectual guidance.

  26. you forgot one asshole, jill:

    “WHAT exactly does a “community organizer” do? Barack Obama’s rise has left many Americans asking themselves that question. Here’s a big part of the answer: Community organizers intimidate banks into making high-risk loans to customers with poor credit.

    In the name of fairness to minorities, community organizers occupy private offices, chant inside bank lobbies, and confront executives at their homes – and thereby force financial institutions to direct hundreds of millions of dollars in mortgages to low-credit customers. ”

    http://www.nypost.com/seven/09292008/postopinion/opedcolumnists/os_dangerous_pals_131216.htm

  27. oops, i forgot the best part:

    “In other words, community organizers help to undermine the US economy by pushing the banking system into a sinkhole of bad loans. And Obama has spent years training and funding the organizers who do it.”

  28. I thought Caylee Anthony’s mom is white? No?

    (Not that it matters what race she is, but it’s confusing to me.)

  29. Actually the Feds rely on the SEC to uncover any financial irregularities. (I have friends and family in the accounting industry) All the compaines in question had the “big 4” accounting firms as their outside auditors and they are most definitely involved in the problems that have caused so many of these firms since Bear Stearns, to end up in a “crisis” mode. I truly believe DUE DILLIGENCE was not done and those auditing firms turned a blind eye and failed to report it. I guess the lessons of Arthur Andersen didn’t teach them anything.

  30. Kate said “And while we’re on this, I’d like to know just exactly where Coulter found this direction among the banks: banks were encouraged to consider nontraditional measures of credit-worthiness, such as having a good jump shot or having a missing child named “Caylee.” ”

    Kate, I assume you are intelligent enough to understand that Coulter is trying to be funny, right? But the substance of her point is that there was a great push from (largely liberal) politicians in Washington to force Freddie and Fannie to fund a lot of people whose credit wasn’t that great. If you doubt that, read up on it. Here are a few stories:

    http://news.yahoo.com/s/ibd/20080925/bs_ibd_ibd/20080925general01

    http://www.econbrowser.com/archives/2008/07/did_fannie_and.html

  31. What I see happening is class warfare. Tonight I heard another republican try to place all the blame on people who took out loans and could not afford them. I just hate the double standard here that it is okay for traders to play the market and make millions and walk away, yet American citizens are not supposed to strive for homeownership or make a small amount of money (compared with Wall Street bonuses) on flipping a house. To me the stock market is just a form of legalized gambling. It seems Republicans like to push individual responsibility and toss out corporate responsibility/business ethics. The only time there are business ethics is when labor unions are strong.

  32. Hank, I’m quite aware of Coulter’s and other’s like her brand of funny. Poke at non-whites, poor women and children and people of third world countries. Har har.

    The Nazis used humor like Coulters as well, its served to allow entire European communities to ignore the burning smell of human flesh waxing over their rooftops.

  34. Allison @ 20: Isn’t Coulter Canadian?

    No, she certainly ain’t. It’s one thing I don’t have to be embarrassed about.

  35. I wouldn’t say minorities are to blame, but I would say the Clinton administration, and Bush administration, had a policy that allowed lenders to give houses away to people who can’t afford them. Those people were hispanic in high proportion, including illegal aliens.

  36. Pingback: Blanca DeBree Blog » An Open Letter to California

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