Refinancing Home Mortgage
In: Mortgage Lending
25 Mar 2010“How banks were bullied into making bad loans”
‘Community activists’ used pressure tactics to secure high-risk mortgages
Posted: April 05, 2009, 7:11 pm Eastern
© 2009 WorldNetDaily
http://www.wnd.com/index.php?fa=PAGE.view&pageId=94031
WASHINGTON – Using tools provided by the federal Community Reinvestment Act, community organizers led by a self-described “banking terrorist” applied bullying tactics to secure high-risk mortgages and to shake down lending institutions for billions of dollars – actions that likely contributed to the “mortgage meltdown” that triggered the worst economic crisis since the Great Depression.
That’s the substance of a new report by the Capital Research Center on the Neighborhood Assistance Corporation of America headed by Bruce Marks.
“NACA has been accused of being overly aggressive and personal,” explains the group’s website. “NACA wears this as a badge of honor, leaving no stone unturned and often hounding CEOs from their shareholder meetings to their homes. The rationale is simple: lenders have a personal and often devastating impact on the lives of the people who they refuse to provide affordable credit to or take advantage of through predatory loans and scams.”
NACA earned that reputation by first targeting Fleet Financial Group of New England, which was accused of lending money to private mortgage companies that, in turn, lent money at “loan shark rates.” NACA filed lawsuits against Fleet and worked with local media on disparaging news coverage. NACA’s “shock troops,” known for wearing yellow shirts, disrupted speeches by bank officials, including one by CEO Terrence Murray at the Harvard Business School.
In 2007, Countrywide Bank was targeted. It quickly acquiesced to demands for a settlement that included a stipulation to restructure its borrowed troubled loans. A year later, Countrywide was insolvent – touching off a string of bank defaults and government bailouts that have cost taxpayers trillions.
“NACA could not operate as it has without the Community Reinvestment Act,” says the CRC report. “The CRA is a federal law, first enacted in 1977, that banned the real estate practice of ‘redlining’ communities, singling out geographical areas where a bank would make no loans. To comply with the CRA, banks had to show that they did not discriminate in making loans in poor and black neighborhoods.”
This is about mortgage information questions.
10 Responses to Who is to blame for the financial mortgage and lending crises?
T
March 25th, 2010 at 6:41 am
Barney Frank
IgnoranceIsYou
March 25th, 2010 at 6:43 am
You answered your own question. Obviously it was the last eight years of the Bush administration that failed to properly monitor and regulate the banking industry, Thanks for making everyone aware of that FACT.
OSU Buckeyes14
March 25th, 2010 at 7:15 am
Community Reinvestment LAW, it’s a constitutional law, known as an act. Really no one is at fault for lending crisis, which succumbs to the economic crisis, that you can clearly blame on bush.
luvforanimals
March 25th, 2010 at 8:13 am
i blame the greedy ceo’s of major banks who lent out way too many loans to get a bigger bonus. greed/gluttony is one of the seven deadly sins.
cbmttek
March 25th, 2010 at 9:04 am
I think it was the people that took out mortgages that they could not afford, and they did not understand the terms.
Last time I checked, it was the responsibility of the borrower to repay the money loaned.
Organism69
March 25th, 2010 at 9:59 am
The banks were least of all bullied, they were in fact enabled by Gramm and others as a way of shaming the democratic agenda. In what way does this differ from the general Republican assumption that debts may be forever increased while taxes for the wealthy must be decreased while the rest of us get reamed- please explain this one or forever hold your peace.
sassy2
March 25th, 2010 at 10:47 am
You are not reporting anything new. I remember the politicians screaming about banks relining certain areas. Not lending mortgage money to people with low paying job. Claiming it is an American Right.
Well here we are and just like a child they pols shrug their shoulders and say Not Me.
Dan
March 25th, 2010 at 11:31 am
Only six percent of the subprime loans that have been foreclosed on were given out by CRA-affiliated banks, so I don’t think that you can blame this recession on the CRA alone. Both parties failed to address this crisis before it started. It was also fueled by private investors who were playing a game of “hot potato” with mortgage-backed securities. They knew that the bubble was going to burst, so they bought up these subprime mortgages and sold them off quickly for a nice little profit. Once the game was over, the investors and bankers that got stuck with these mortgages suffered a huge hit. There is a lot of blame to go around for this one. Not many folks in D.C. or on Wall Street can claim that they had nothing to do with it.
Tom R
March 25th, 2010 at 12:18 pm
Pres. Clinton then Pres. Bush. Clinton started the problem and Bush let it continue.
SCOTT M
March 25th, 2010 at 1:16 pm
Barney Frank is felon #1.