Obama Sued Citibank Under CRA to Force it to Make Bad Loans

[Dari]

Originally posted by: Mxylplyx
I never recall being asked to describe my race on a loan application. How would a loan underwriter even know the race of their applicants?

Name, current address, looking at the applicant, etc...

 

[RightIsWrong]

Originally posted by: eleison

Originally posted by: SP33Demon

Originally posted by: aphex

C­as­e­ Nam­­e­
Bu­yc­k­s-Ro­berso­n­ v. C­i­ti­ban­k­ F­ed. Sav. Ban­k­ F­ai­r Ho­u­si­n­g/Len­di­n­g/I­n­su­ran­c­e
Do­c­k­et / C­o­u­rt 94 C­ 4094 ( N­.D. I­ll. ) F­H-I­L-0011
State/Terri­to­ry I­lli­n­o­i­s
C­ase­ Su­mmar­y
Pla­i­nt­i­ffs fi­led­ t­hei­r­ cla­ss a­ct­i­o­n la­w­sui­t­ o­n July­ 6, 1994, a­llegi­ng t­ha­t­ Ci­t­i­ba­nk­ ha­d­ enga­ged­ i­n r­ed­li­ni­ng pr­a­ct­i­ces i­n t­he Chi­ca­go­ m­et­r­o­po­li­t­a­n a­r­ea­ i­n vi­o­la­t­i­o­n o­f t­he Equa­l Cr­ed­i­t­ O­ppo­r­t­uni­t­y­ A­ct­ (ECO­A­), 15 U.S.C. 1691; t­he Fa­i­r­ Ho­usi­ng A­ct­, 42 U.S.C. 3601-3619; t­he T­hi­r­t­eent­h A­m­end­m­ent­ t­o­ t­he U.S. Co­nst­i­t­ut­i­o­n; a­nd­ 42 U.S.C. 1981, 1982. Pla­i­nt­i­ffs a­lleged­ t­ha­t­ t­he D­efend­a­nt­-ba­nk­ r­eject­ed­ lo­a­n a­ppli­ca­t­i­o­ns o­f m­i­no­r­i­t­y­ a­ppli­ca­nt­s w­hi­le a­ppr­o­vi­ng lo­a­n a­ppli­ca­t­i­o­ns fi­led­ by­ w­hi­t­e a­ppli­ca­nt­s w­i­t­h si­m­i­la­r­ fi­na­nci­a­l cha­r­a­ct­er­i­st­i­cs a­nd­ cr­ed­i­t­ hi­st­o­r­i­es. Pla­i­nt­i­ffs so­ught­ i­njunct­i­ve r­eli­ef, a­ct­ua­l d­a­m­a­ges, a­nd­ puni­t­i­ve d­a­m­a­ges.

Wow, looks like he was really doing a horrible and despicable thing, fighting against apparent racism.

OP = self pwned.

I'm from chicago. Most foreclosures in chicago are in the minority areas where most "blacks" happen to live. I know this because my best friend from college is a real estate agent who mostly helps his clients buy foreclosures.

Nothing like a lawsuit "alleging" racism to pressure banks to make bad loans.

Do you think that there could be other reasons besides the neighborhoods being black that could be a factor in the foreclosures?

Maybe it has something to do with those living in those neighborhoods being in service sector type jobs? In a down economy, those are the first jobs to go. That also makes them some of the hardest jobs to get. No job, no pay the mortgage, foreclosure.

 

[Slick5150]

Originally posted by: eleison

Originally posted by: SP33Demon

Originally posted by: aphex

C­as­e­ Nam­­e­
Bu­yc­k­s-Ro­berso­n­ v. C­i­ti­ban­k­ F­ed. Sav. Ban­k­ F­ai­r Ho­u­si­n­g/Len­di­n­g/I­n­su­ran­c­e
Do­c­k­et / C­o­u­rt 94 C­ 4094 ( N­.D. I­ll. ) F­H-I­L-0011
State/Terri­to­ry I­lli­n­o­i­s
C­ase­ Su­mmar­y
Pla­i­nt­i­ffs fi­led­ t­hei­r­ cla­ss a­ct­i­o­n la­w­sui­t­ o­n July­ 6, 1994, a­llegi­ng t­ha­t­ Ci­t­i­ba­nk­ ha­d­ enga­ged­ i­n r­ed­li­ni­ng pr­a­ct­i­ces i­n t­he Chi­ca­go­ m­et­r­o­po­li­t­a­n a­r­ea­ i­n vi­o­la­t­i­o­n o­f t­he Equa­l Cr­ed­i­t­ O­ppo­r­t­uni­t­y­ A­ct­ (ECO­A­), 15 U.S.C. 1691; t­he Fa­i­r­ Ho­usi­ng A­ct­, 42 U.S.C. 3601-3619; t­he T­hi­r­t­eent­h A­m­end­m­ent­ t­o­ t­he U.S. Co­nst­i­t­ut­i­o­n; a­nd­ 42 U.S.C. 1981, 1982. Pla­i­nt­i­ffs a­lleged­ t­ha­t­ t­he D­efend­a­nt­-ba­nk­ r­eject­ed­ lo­a­n a­ppli­ca­t­i­o­ns o­f m­i­no­r­i­t­y­ a­ppli­ca­nt­s w­hi­le a­ppr­o­vi­ng lo­a­n a­ppli­ca­t­i­o­ns fi­led­ by­ w­hi­t­e a­ppli­ca­nt­s w­i­t­h si­m­i­la­r­ fi­na­nci­a­l cha­r­a­ct­er­i­st­i­cs a­nd­ cr­ed­i­t­ hi­st­o­r­i­es. Pla­i­nt­i­ffs so­ught­ i­njunct­i­ve r­eli­ef, a­ct­ua­l d­a­m­a­ges, a­nd­ puni­t­i­ve d­a­m­a­ges.

Wow, looks like he was really doing a horrible and despicable thing, fighting against apparent racism.

OP = self pwned.

I'm from chicago. Most foreclosures in chicago are in the minority areas where most "blacks" happen to live. I know this because my best friend from college is a real estate agent who mostly helps his clients buy foreclosures.

Nothing like a lawsuit "alleging" racism to pressure banks to make bad loans.

I think the point of the lawsuit was that, if these were so called "bad loans", they were freely making them already to white applicants, but denying them to black ones.

So, either you think that only black people can take out "bad loans", or this whole thread is f#@king stupid. Your call.

 

[GeezerMan]

Originally posted by: chess9

Originally posted by: GeezerMan

Originally posted by: aphex

Originally posted by: GeezerMan

Originally posted by: eskimospy

Originally posted by: GeezerMan
I never saw any racism toward loan applicants in the 13 years I spent in banking. It was bottom line oriented.
Credit OK? Got a job? You would get your loan. I was with a group of mixed race co-workers downtown years ago when a minority group was picketing outside our main bank. They called the bank racists on their signs for not making loans. I asked my black and Hispanic co-workers what they thought. It boiled down to get a job, keep good credit, get a loan.

You know there have been studies on this subject that have strongly shown racism in lending and housing, right?

Yeah, sure do. I also saw the pressure put on the bank to make bad loans too.
We were not a bunch of elite bankers either. My group made the $20s and low $30s at that time in the operations side.
Some of us coming from the very neighborhoods that were supposedly discriminated against.

I don't discount what you are saying, but just because you didn't see it where you were doesn't mean it didn't exist.

Did'nt say it does not exist. It's blown out of proportion.

It all depends on your location. If you are from Iowa, you won't be seeing much of it.

Blaming the CRA for these loans is nonsense. The bad derivatives go into the trillions of dollars. Bad CRA loans MIGHT be as high as 100 million dollars, but I doubt it.

This is like saying a guy with lung cancer died from his hangnail.

-Robert

Agreed. I'm in Dallas, not Iowa. And I worked at the biggest bank in town. We were very involved in the CRA. We have a well known racial divide here.

CRA is a problem, but its not that large of a chunk of our current credit crisis. It is more about banks making layered derivative "investments"

 

[DealMonkey]

Originally posted by: Genx87
Oh god get over yourself. If ACORN is suing banks to force them to make bad loans that ultimately fail. Do we have a right complain when said bank comes crawling to the govt for a bailout?

Oh please, suing a banking institution for engaging in red-lining != suing to force them to make bad loans. Red-lining MEANS the bank's own standards allow the loan in one neighborhood, but not in another.

Furthermore, this article is proof of nothing. The suit took place in 1994, well before the sub-prime crisis was underway. The share of subprime originations to total originations was 5% in 1994, compared to 20% in 2006. Furthermore, it's been shown over and over that subprime originations that fail, ultimately fail within the first 2-3 years.

Remember, this suit took place in 1994.

Lame. Go back and dig up something relevant you losers.

 

[nageov3t]

Originally posted by: eskimospy
Oh, and right now there are no fewer than 4 anti-Obama threads on the front page. (with one Palin thread, zero anti-McCain) The anti-Obama threads are about such fascinating topics as 'Obama rigging elections in Kenya', 'Obama and ACORN', 'Obama and cross dressers', and this ridiculous thread.

Am I smelling some desperation or what?

clearly we need more posts about twenty year-old scandals and Palin's annoying accent

 

[eleison]

Originally posted by: RightIsWrong

Originally posted by: eleison

Originally posted by: SP33Demon

Originally posted by: aphex

C­as­e­ Nam­­e­
Bu­yc­k­s-Ro­berso­n­ v. C­i­ti­ban­k­ F­ed. Sav. Ban­k­ F­ai­r Ho­u­si­n­g/Len­di­n­g/I­n­su­ran­c­e
Do­c­k­et / C­o­u­rt 94 C­ 4094 ( N­.D. I­ll. ) F­H-I­L-0011
State/Terri­to­ry I­lli­n­o­i­s
C­ase­ Su­mmar­y
Pla­i­nt­i­ffs fi­led­ t­hei­r­ cla­ss a­ct­i­o­n la­w­sui­t­ o­n July­ 6, 1994, a­llegi­ng t­ha­t­ Ci­t­i­ba­nk­ ha­d­ enga­ged­ i­n r­ed­li­ni­ng pr­a­ct­i­ces i­n t­he Chi­ca­go­ m­et­r­o­po­li­t­a­n a­r­ea­ i­n vi­o­la­t­i­o­n o­f t­he Equa­l Cr­ed­i­t­ O­ppo­r­t­uni­t­y­ A­ct­ (ECO­A­), 15 U.S.C. 1691; t­he Fa­i­r­ Ho­usi­ng A­ct­, 42 U.S.C. 3601-3619; t­he T­hi­r­t­eent­h A­m­end­m­ent­ t­o­ t­he U.S. Co­nst­i­t­ut­i­o­n; a­nd­ 42 U.S.C. 1981, 1982. Pla­i­nt­i­ffs a­lleged­ t­ha­t­ t­he D­efend­a­nt­-ba­nk­ r­eject­ed­ lo­a­n a­ppli­ca­t­i­o­ns o­f m­i­no­r­i­t­y­ a­ppli­ca­nt­s w­hi­le a­ppr­o­vi­ng lo­a­n a­ppli­ca­t­i­o­ns fi­led­ by­ w­hi­t­e a­ppli­ca­nt­s w­i­t­h si­m­i­la­r­ fi­na­nci­a­l cha­r­a­ct­er­i­st­i­cs a­nd­ cr­ed­i­t­ hi­st­o­r­i­es. Pla­i­nt­i­ffs so­ught­ i­njunct­i­ve r­eli­ef, a­ct­ua­l d­a­m­a­ges, a­nd­ puni­t­i­ve d­a­m­a­ges.

Wow, looks like he was really doing a horrible and despicable thing, fighting against apparent racism.

OP = self pwned.

I'm from chicago. Most foreclosures in chicago are in the minority areas where most "blacks" happen to live. I know this because my best friend from college is a real estate agent who mostly helps his clients buy foreclosures.

Nothing like a lawsuit "alleging" racism to pressure banks to make bad loans.

Do you think that there could be other reasons besides the neighborhoods being black that could be a factor in the foreclosures?

Maybe it has something to do with those living in those neighborhoods being in service sector type jobs? In a down economy, those are the first jobs to go. That also makes them some of the hardest jobs to get. No job, no pay the mortgage, foreclosure.

Actually, when I was talking to him, it was surprising there weren't more foreclosures in the "white" neighborhoods -- lakeview, rogers park (gentrifying), wicker park, etc. According to him, when housing went south, most of the residents of these neighborhoods where able to absorb the losses without going into foreclosure -- ie., sell for "cheaper".

The residents of the minority neighborhoods (sourth side, "austin", etc) -- not so much. Coupled with the bad economy and low equity, they were pretty much screwed.

It was a shame really. I was really thinking maybe I could score some cheap properties in the "non-minority" neighborhoods.

 

[umbrella39]

Originally posted by: Corbett
http://www.mediacircus.com/200...e-it-to-make-bad-loans

Title says it all.

Indeed it does. It speaks volumes. Use your head for something more than a space holder OP.

 

[eleison]

Originally posted by: GeezerMan


Agreed. I'm in Dallas, not Iowa. And I worked at the biggest bank in town. We were very involved in the CRA. We have a well known racial divide here.

CRA is a problem, but its not that large of a chunk of our current credit crisis. It is more about banks making layered derivative "investments"

I don't understand. But aren't layered derivative -- especially the bad ones, mostly based on the bad housing loans? From what I understand, didn't derivatives have rankings. Some derivatives are better than others - but due to regulation like CRA, we had bad derivatives masquerading as good derivatives which were bough up by investment firms believing they had something stable -- but they really didn't?

 

[GeezerMan]

Originally posted by: eleison

Originally posted by: GeezerMan


Agreed. I'm in Dallas, not Iowa. And I worked at the biggest bank in town. We were very involved in the CRA. We have a well known racial divide here.

CRA is a problem, but its not that large of a chunk of our current credit crisis. It is more about banks making layered derivative "investments"

I don't understand. But aren't layered derivative -- especially the bad ones, mostly based on the bad housing loans? From what I understand, didn't derivatives have rankings. Some derivatives are better than others - but due to regulation like CRA, we had bad derivatives masquerading as good derivatives which were bough up by investment firms believing they had something stable -- but they really didn't?

I'm guessing most of the bad housing loans are not related to the CRA. Greed took over, and loans were made that should not have been made, all over the place.
Too bad I'm no longer in banking to get the inside scoop. Not that I would get a straight answer anyway. I was pretty low on the totem pole.
CRA is still a crock though.

 

[AreaCode7O7]

The bank could have achieved equality just as easily by denying bad loans for majorities instead of granting bad loans for minorities. Ergo, even if Obama was suing for equality, it is still the bank's fault.

 

[Moonbeam]

The bogey man is about to become President.

 

[chess9]

Originally posted by: eleison

Originally posted by: GeezerMan


Agreed. I'm in Dallas, not Iowa. And I worked at the biggest bank in town. We were very involved in the CRA. We have a well known racial divide here.

CRA is a problem, but its not that large of a chunk of our current credit crisis. It is more about banks making layered derivative "investments"

I don't understand. But aren't layered derivative -- especially the bad ones, mostly based on the bad housing loans? From what I understand, didn't derivatives have rankings. Some derivatives are better than others - but due to regulation like CRA, we had bad derivatives masquerading as good derivatives which were bough up by investment firms believing they had something stable -- but they really didn't?

You need to read more about derivatives, but the bottom line is not that the mortgages were so bad when made, but when you combine dropping home values with some loans re-setting their interest rates, and highly leveraged derivatives, the changes in value become greatly magnified; plus, the credit default swaps may now be the largest issue of all because the underlying insuror, AIG, is bankrupt. Investment banks were levered 30-50 x to 1. Regular banks enjoy about an 8-10 x lever. Big difference. Kapish? The derivatives are trillions of dollars in many banks around the world. The actual bad mortgages may only be 50 billion or so in the USA. (no one really knows and this is a guess by one of the gurus)

I'm off for my 5 mile run. LATER!

-Robert