Mortgage lawsuits against BofA, Citigroup and Wells Fargo resurrected

Sep 2013
46,293
37,391
On a hill
In a unanimous vote, the 11th U.S. Circuit Court of Appeals reversed a lower court’s dismissal of the city's claims under the federal Fair Housing Act.

Miami’s lawsuit alleges the three banks engaged in a long-term lending discrimination in its residential housing market programs.

"It is clear that the harm the city claims to have suffered has a sufficiently close connection to the conduct the statute prohibits," Circuit Judge Stanley Marcus wrote.

snip

The lawsuit in Miami charged that the three banks steered black and Hispanic borrowers toward higher-cost loans.

The city said in its brief that this "reverse redlining" led to a large number of foreclosures, lower property tax collections and increased cost to the city to deal with the resultant property values loss and concomitant blight.

Mortgage lawsuits against BofA, Citigroup and Wells Fargo resurrected | 2015-09-02 | HousingWire
 
Nov 2010
23,156
14,835
Banks are scumbags, they are the worst. You give them money in a saving account, they give you a 1% interest on it, you take out a loan, those fuckers want 10% or more. Credit Card companies are worse than loan sharks, their rates can go as high as 30%. How the fuck is that legal?
 
Sep 2013
46,293
37,391
On a hill
Banks are scumbags, they are the worst. You give them money in a saving account, they give you a 1% interest on it, you take out a loan, those fuckers want 10% or more. Credit Card companies are worse than loan sharks, their rates can go as high as 30%. How the fuck is that legal?
I only wish I were getting 1% interest on savings.
 

Six

Sep 2006
5,085
919
Houston, Tx
Wow, so the Clinton administration forces Banks to lower their lending standards under the threat of Federal Prosecution, then co-opts Fannie Mae and Freddie Mac into purchasing, bundling and then selling Trillions of dollars in worthless loans as MBSs, appoints criminals to run the GSEs into the ground and people still think the Banks are to blame.

Fannie and Freddie were the two most corrupt Financial entities in the run up to the 2008 Financial Crisis, and were run by , protected by and defended by the Democrats.
 

Six

Sep 2006
5,085
919
Houston, Tx
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In 1992, under the leadership of Democrat James Johnson, Fannie and Freddie were given a NEW Affordable Housing Mandate. ( in Title XIII of the Housing and Community Development Act of 1992 ) which was enforced through HUD ( Housing Urban Development ) regulations by placing them under a Quota System which started at 30%

The GSE's percentage of sub-prime or "Alt-A" loans prior to 1992, were under 10%.

But on its own this new "Affordable Lending" policy wasn't enough to increase loan opportunity to the millions of "disadvantaged" Americans with poor credit, questionable work history and no collateral, so the Democrats set off to manufacture the massive False Narrative of " discrimination in lending.

In 1992, at the direction of the Clinton adminisitration the Boston Fed published a highly flawed study called " Closing the Gap ", which gave legitimacy to the charges that banks were discrimination based on the color of their lenders skin. It also offered measures for addressing this made up narrative which included loosening income thresholds for receiving a mortgage, and using government policy to influence the standards that had kept Lenders solvent for decades.
http://www.bostonfed.org/commdev/closing-the-gap/

Private analyst and at least one FDIC economist found embarrassing mistakes in the data used by the Boston FED. The Boston FED study didn't take into account relevent information like the applicants prior denials, his net worth, his debt burden and his employment records. It also failed to verify the integrity of the information submitted by the applicants.

In 1994, the 20-page "Policy Statement on Discrimination in Lending" was entered into the Federal Register by the Interagency Task Force on Fair Lending, which was the Agnecy created by Clinton to address suspected "redlining" and discrimination.

"The agencies will not tolerate lending discrimination in any form," the document warned financial institutions.

At the Clinton administrations dircection, 10 Federal agencies set out to enforce the new standards set forth by the Clinton administartion which included easing the credit restrictions for low income and minority lenders or face DOJ investigations for lending discrimination. Lenders were also threatened with denial of access to the Secondary Markets.

"HUD is authorized to direct Fannie Mae and Freddie Mac to undertake various remedial actions, including suspension, probation, reprimand or settlement, against lenders found to have engaged in discriminatory lending practices,"

In 1994, The Riegle Neal Act tied a banks CRA score directly to the abillity to expand accross state lines and merge with other banks.

"Applying different lending standards to applicants who are members of a protected class is permissible," it said. "In addition, providing different treatment to applicants to address past discrimination would be permissible."

The FDIC warned banks that even UNINTENTIONAL Discrimination would be prosecuted. The FDIC advised banks to be PROACTIVE in making "multicultural" loans. "An ounce of prevention is worth a pound of cure," they warned.

The threat of DOJ prosecution was real and even the American Bankers Association issued a "fair-lending tool kit" to every member. The Mortgage Bankers Association of America signed a "fair-lending" contract with HUD. So did Countrywide.

"The Department of Justice is authorized to use the full range of its enforcement authority."

In 1998 Attorney General Janet Reno bragged in a speech about her 13 succesful lawsuites against lenders and one against NationWide Insurance for discriminatory actions against minority lenders.

In 1998, HUD settled with ACUBank for 2.1 Billion dollars. The claim that lenders weren't forced is of course a lie. If Lenders were sincerely discriminating on the basis of color, and NOT lending to minorities, then WHY did they have to lower standards to fight it ?

The truth is the innate Free Market Lending Standards that had kept the primary and secondary markets stable for decades were deemed " racist " by the Clinton administration.
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The Corruption of Fannie Mae and Freddie Mac.



In 1994, the Chairman of Fannie Mae, James Johnson commited 1 TRILLION Dollars in " Targeted Home Loans".
http://www.thefreelibrary.com/FANNIE+MAE+CHAIRMAN+JIM+JOHNSON+SAYS+$1+TRILLION+COMMITMENT+IS+ON...-a018094342

Clintons long list of executive orders comprised in his 1995 National Homeownership Strategy set a new HUD affordable lending goal for Fannie Mae and Freddie Mac.

"In 1994, at the President’s request, the U.S. Department of Housing and Urban Development (HUD) began work to develop a National Homeownership Strategy with the goal of lifting the overall homeownership rate to 67.5 percent by the end of the year 2000. While the most tangible goal of the National Homeownership Strategy was to raise the overall homeownership rate, in presenting the strategy HUD pointed explicitly to declines in homeownership rates among low-income, young, and minority households as motivation for these efforts." - U.S. Department of Housing and Urban Development Office of Policy Development and Research

"At the request of President Clinton, HUD is working with dozens of national leaders in government and the housing industry to implement the National Homeownership Strategy, an unprecedented public-private partnership to increase homeownership to a record-high level over the next 6 years." - Urban Policy Brief Number 2, August 1995

HUD's 1996-2000 GSE Goals...
http://www.huduser.org/Publications/PDF/AREUEA_Presentation.pdf

HUD established the GSEs’ housing goals for 1996-99 on December 1, 1995, and these
goals continued in effect for 2000, as follows:

The low- and moderate-income (LM) goal: at least 40 percent of the dwelling units
financed by each GSE had to be for LM families in 1996, and the goal rose to 42 percent
for 1997-2000.

The special affordable (SA) goal: at least 12 percent of the units financed by each GSE
had to be for SA families in 1996, and the goal rose to 14 percent for 1997-2000.

The underserved areas (UA) goal: at least 21 percent of the units financed by each GSE
had to be for families in UAs in 1996, and the goal rose to 24 percent for 1997-2000.

The special affordable multifamily (SAMF) subgoals: for each year 1996-2000, Freddie
Mac had to finance at least $0.99 billion in special affordable multifamily housing, and Fannie Mae had to finance at least $1.29 billion.

From 1993 to 1998 Clinton appointed his Democrat buddies to the Executive and chair positions at the two GSE's including Franklin Raines, who was at the the center of the 2004 SEC investigation into Fannie Maes corrupt accounting scam. It also included Jamie Gorelick who in 2000 at a banking conference beseeched lenders to sell Fannie Mae their CRA loans...
"We want your CRA loans because they help us meet our housing goals. "We will buy them from your portfolios or package them into securities."

Jamie Gorelick characterized CRA firendly loanswith a 3% or less down payment and that were made using "flexible underwriting" methods. So much for CRA not being Sub-prime.

Clintons 1995 CRA changes also required lenders to be scored by Federal regulators on their CRA commitments. Those scores were then published so that Community Activist groups like ACORN could target them for " racist lending pracitices".

In 1995 The Chicago Sun ran this add from ACORN....
"‘You’ve got only a couple thousand bucks in the bank. Your job pays you dog-food wages. Your credit history has been bent, stapled, and mutilated. You declared bankruptcy in 1989. Don’t despair: You can still buy a house.'

In 2000, the Senate Banking Committee estimated that community groups such as ACORN and La Raza had received $9.5 billion in services and salaries stemming from Clintons 1995 CRA changes.

By 1997, Fannie Mae was offering to buy 97% loan-to-value (LTV) mortgages

In November of 1998, " Freddie Mac helped First Union Capital Markets and Bear Stearns & Co launch the first publicly available securitization of CRA loans, issuing $384.6 million of such securities. All carried a Freddie Mac guarantee as to timely interest and principal. First Union was not a subprime lender "