To pick up some information while washing Sunday breakfast dishes I turned on the little kitchen TV which was tuned to the Chicago public television network. The program in progress was a documentary focussing on housing foreclosures with particular attention to Shelby County Tennessee, the county in which Memphis is located. In response to the high level of foreclosures there, a federal lawsuit has been filed by the county against a number of major banks. The banks are charged with “reverse RedLining”. The assertion is that the banks engaged in the predatory practice of targetting prospective buyers who clearly lacked the means to afford home ownership and deceived them into accepting sub-prime mortgages. The assertion is that the banks, which made their profits up front by packaging and selling off the risks of these bad loans, were motivated by simple greed and were guilty of exploitation of the borrowers. Although the format of the piece involved numerous interviews, not once did the interviewer raise a question about the impact of the Community Redevelopment Act or the pressure on banks from Acorn operatives like the young Barack Obama. The story line was apalling in its logic:
1-“Redlining” exploited blacks by refusing to grant loans to buyers in black neighborhoods.
2-“Reverse Redlining” exploited blacks by granting loans to the same buyers.
The truth we’re all aware of was completely absent from this piece. Banks unwilling to make loans to buyers unable to afford houses were pressured by the Federal government and community action groups. When they yielded to the pressure and made a number of bad loans, they soon were forced to accept the losses involved in foreclosing on properties, many of which had lost value through lack of upkeep. Their attempts to limit their exposure to loss by selling off high risk mortgage paper to Fannie and Freddie – the theoretical government support for the pressure exerted to make such bad loans – results in being taken to court for “exploitation”
Lies upon lies! And the guys spending billions of taxpayer dollars to “solve the problem” have been successful in hiding their responsibility for causing the problems in the first place. God Help Us!