Comments on: Racially “targeting” predatory subprime loans? The NAACP and Baltimore suits

By: Anonymous Attorney

Anonymous Attorney — Mon, 14 Jan 2008 10:19:00 +0000

Alas, Karl, I doubt any journalists will peer as deeply as you describe. That’s because charges of “racism” are generally taken at face value by the press. Even when, as here, it’s a little absurd to consider that, as other posters note, banks used to be called racist for DOING THE EXACT OPPOSITE.

Ahem.

By: Tracy

Tracy — Mon, 14 Jan 2008 10:00:06 +0000

You arent kidding Karl. The articles in the Baltimore Sun that have been in support of these suits tell stories about people who, after taking the mortgage, lost their jobs, and then lost their homes. Now, I don’t know about you, but if I lost my job for an extended period I would be unable to pay my mortgage too. These stories play on the sympathy of a potential juror, but are completely irrelevant to the lawsuit.

By: Karl

Karl — Mon, 14 Jan 2008 08:29:22 +0000

I am still awaiting the journalistic coup de grace against these named “predatory” lenders that should lead to a pulitzer prize for the factual portrayl of the alleged misdeeds. To date it seems that there are only anecdotal snippets involving minute segments of the mortgage market that are manupulated and distorted. what % of these home are non owner occupied? what are avergae FICO scores BEFORE and AFTER the foreclosure? HOW much debt was incurred after the mortgage was taken out. what are the names of the attorneies and title companies that forced these people to sign? now you have the basis for some real journalism….

By: DLM

DLM — Sun, 13 Jan 2008 12:12:25 +0000

Todd Rogers,

Obviously, “sity” was a typo. I hope you did notlose any sleep over it.

By: bob neal

bob neal — Sun, 13 Jan 2008 06:42:14 +0000

And the result is all of us will pay higher rates to make sure those with less than perfect credit don’t feel discriminated against.

And since when is a government entitled to appreciation of property to the point it can sue for a loss? I guess cities should be able to sue each time a business closes? Or maybe a city can force a developer to build sooner b/c it wasn’t the benefit of higher taxes on the property?

By: Todd Rogers

Todd Rogers — Sat, 12 Jan 2008 22:44:50 +0000

Leaving the merits of the above posters’ arguments aside, I can’t tell if you both forgot to use “[sic]” a time or two…the letter “c” is sort of close to the letter “s” on the keyboard but c’mon…you have to be kidding me! Hardly perfect am I but am I missing something here?

By: nevins

nevins — Sat, 12 Jan 2008 20:34:55 +0000

When on board an airplane it is a fair assumption that no one else on that flight paid the exact same amount that you did. The airlines will try to get the highest amount from each person that they think they can. If members of a particular class or group consistently accept higher rates does that make them 1) wealthy enough that they don’t look hard for a good price, or 2) financially unsophisticated enough that they don’t look for a good price?
The outcome cited, that minorities are offered higher interest rates probably means that minorities have taught lenders that it is financially savvy to offer higher rates because minorities will accept them (being financially less savvy).
This is not racism, just business. Even practices blind to race can have disparate impact if groups behave consistently in a manner contrary to their own best interest.

By: Tracy

Tracy — Sat, 12 Jan 2008 18:54:13 +0000

DLM, the point the city is making is that Wells made loans in black neighborhoods that were more likely to result in forclosure then in white neighborhoods (they were careful not to outright say black/white customers). They claim those loans had higher fees and worst rates. This is were the arguement falls short, as it doesnt take into account that the majority of the gentrified neighborhoods (those with wealthier residents) are white, and that skews the results. Additionally, they completely disregard the fact that the risk based pricing model that lenders use has no place for race.

As for standing, they are claiming that the city has been deprived of property tax revenues due to forclosures. Additionally, they claim that there are additional fire and police cost incurred by abandoned homes and they want to recoup this cost.

I personally find it hilarious that this comes just a decade or so after lawsuits claiming lenders were refusing to lend in those same neighborhoods. My guess is lenders are going to start pulling out of the city (ask WV what happened out there) because they dont want to subject themselves to potential lawsuits.

By: DLM

DLM — Sat, 12 Jan 2008 14:31:52 +0000

So long as Wells Fargo has a contractual right to foreclose, what possible difference does it make if it does so more frequently in the case of black borrowers? In other words, what legal harm can one suffer (or a sity, for that matter) from a foreclosure that is fully justified by the underlying loan agreements?

Frankly, the idea that someone at Wells Fargo has decided to tip the scale in favor of forceclose for blacks (but not other races) seems utterly implausible on its face. But of course, that doesn’t stop plaintiffs from wasting everyone’s time with baseless lawsuits.