yodas light saber is green

@nospacesinmyname: The point of the story is that color doesn't matter. ;)

Oh, boy. I think at one point in everyone's life someone calls them racists. Maybe not to their face but it happens. Its a sure fire easy way to end a conversation or debate you aren't winning.

@taney71: Yes, but most people probably aren't facing damning statistics showing their level of consistent institutional racism.

the still-unnamed bank escaped the outing by settling before the suit was filed.

I think I know where some of that bailout money went.

This story smells funny to me. Why were they signing a subprime loan if they qualified for a prime loan? The NAACP was only now trying to protect their constituents? The housing boom lasted for about 5 or 6 years so they had plenty of time to file a lawsuit. My feeling is that the NAACP was fine with everything until the hatred towards the banking industry is at an all time high and then gets paid.

@Eyebrows McGee (on Twitter: LPetelle): I wonder if the statistics are there. If you just look at minority loans it might look like they were given loans they couldn't afford. But if you look at the entire population everyone was given these type of loans.

We have to remember the federal government was encouraging these loans either through laws like the Community Reinvestment Act or by direct threat. Politicans like Barney Frank who pushed these loans said as recently as 2005 when the Bush administration was trying to regulate the area that the system was fine. Frank basically called the Bush people racists for even thinking that minorities might not be able to pay these loans.

@TEW: Because the lenders didn't dell the mortgagees they qualified for the prime loan.

Correlation does not imply causation

There is a reason it is illegal to discriminate services (such as real estate and loans) based on race. It has happened before, and it has negative impact on everyone.

When it comes to things like systematic bias (that can't be easily seen on a case by case basis) it can take years to build up a case. And although a computer can describe the risk of someone regardless of race, the loan officer is going to make the final call. This needs to be fixed, and given how much money these banks likely made of these types of loans, they need to pay to fix it.

@James Babiak.. Get real.

the whole reason we got into this mess was because the banks were making risky loans. Now those people are defaulting. If anything the naacp should be apologizing to the banks

@James Babiak: Correct me if I'm wrong.

You're wrong.

This isn't a new accusation against either of these banks. It seems like something that is difficult to figure out, with so many factors going into a decision on a mortgage loan. Of course, if either company was actually using race as a statistic to give a loan- that's just BS. Skin color isn't a valid predictor of risk on a loan.

Of note, not that many years ago- both companies were accused of not giving enough loans to African Americans.

And, the study that the lawsuit is based upon also states that whites were disadvantages compared to Hispanics on receiving many different types of loans... [www.chicagofed.org]

Jealous said subprime mortgages, intended for people with poor credit, were given to African-Americans who qualified for better loans 54 percent of the time compared with 23 percent for white people.

I wonder how they define "better loans" - my understanding is that lots of people got subprime loans because they could qualify for a better loan, but not with terms they wanted - length, down payment, ect - or they wanted to borrow more than they could with a regular loan.

The lesson in this is to shop around for a mortgage.

@James Babiak: Wow. "Factual based humor," is it?

I don't think you're qualified to judge whether something is or is not racist.

@B
That is if you only use one mortgage lender. Where I live you could walk to 5 different banks and apply for a loan. If you do it within 30 days the applications don't hurt your credit score. The all mighty dollar usually trumps any racism.

Let's make an assumption for a moment: that, adjusted for all other measurable factors, race and race alone impacts the default rate of a loan. Would it not then make sense for race to be a factor in whether or not one gets a loan? The social utility of financial institutions is that they allocate capital (which there is a limited amount of,) and if they are able to better predict who will best use said capital, society as a whole is better off.

@chuckv: I'd love to see the banks use that argument. "Them pesky black folk -- they just don't pay us back as often as white people. That's why we steer them toward subprime loans." I'm sure the DOJ would have a field day with that.

I find this incredibly hard to believe. In the past decade there was so little human intervention in lending and I can assure you that race was not one of the factors used by the computers.

This sounds like a shakedown to me.

@spanky:
When I said 'factual based humor' I was talking about my examples. Black culture glamorizes everything I cited. If you don't believe me, go into a black community and look around. Or if you aren't suicidal, watch a little BET for as long as you can stand it. If you disagree, show me some statistics that prove that I'm wrong. There is a reason why racial stereotypes exist. It's because people of that race exemplify them. You can disagree with me and call my point of view racist, but I will in turn call your view ignorant.

@taney, @ eyebrows:
I've just noticed that people here that use the words "Barney Frank", "CRA" and "statistics" in the same sentence always throw out the word "statistics" without even the merest wisp of familiarity of the term.

I could pile on further, but it'd be like describing the flocking patterns of veldt antelopes to a fish.

And why shouldn't race be a factor, any more then gender or age? When I got car insurance as a kid, I had to pay a very high premium. I was 25 or a female at the same age, I would pay less. Why is that legal and accepted? The insurance companies can take into account those factors when looking at statistics on accidents and claims, and adjust their rates accordingly. If a young male has a higher risk, they pay a higher premium. If the default rate for blacks on mortgages are higher then average, why shouldn't they pay a higher premium? Because if they don't for political correctness, guess who is paying for it? You and me.

@James Babiak: Way to make racist jokes while not reading the article.

@James Babiak: That's right, insurance is very discriminatory, why shouldn't mortgages be as well?

@dragonpup:

On the contrary. I read the article on consumerist as well as the original one on seattlepi.com. Nothing was substantiated. It was all a lot of claims about how whites got better rates on average. Then goes onto a spiel about how hard life is for minorities. And finalized with the report of the successful extortion of one bank, and how they want to stop the other two from this horrid practice....
Here comes affirmative action in the mortgage market.

@taney71: I highly suggest you actually read the article and not repeat talking points from some political hack.

"The class actions against Wells Fargo, based in San Francisco, and Illinois-based HSBC claim that black homeowners were far more likely to be issued a higher interest rate than white borrowers with the [b]same qualifications. "

"Jealous said subprime mortgages, intended for people with poor credit, were given to African-Americans who qualified for better loans 54 percent of the time compared with 23 percent for white people."

This isn't a margin or error deviation, blacks were apparently getting taken advantage of with loans at a signifigantly higher rate than whites.

BBC News actually had a shaded map of percent of defaults Deutshe Bank had in Cleveland and then compared a map of where Blacks lived in the city. I guess some who are way to PC would see that as racist, but its not racist to show facts.

@taney71: It's not a question of whether or not everyone got it, but a question of whether or not one specific group was substantially targeted to receive the loans more than another group. The statistical data does indeed show that more African Americans receive Sub-prime loans than any other ethnic group.

Now the other fact of the matter is that these guys, unlike what most people seem to think, did not get loans they knew they could not pay. When they got the loans at the absolute behest of their lenders, they were assured their rates would likely never change or if they did change, they would remain low. On that notion, groups of people, primarily first time home buyers - not just African Americans - got loans, which for a period of time, they believed they could pay off. Additionally, lets be real with ourselves: Till those rates started jumping through the roof, persons with these adjustable rates COULD pay off their mortgages. It was only AFTER their rates went to ridiculous highs by comparison to their original rates that they became unable to pay their mortgages.

Therefore, the statement that they jumped into mortgages irresponsibly knowing they couldn't pay it off is a misconception and possibly a complete fallacy.

I believe the show, Boston Legal did an episode on this...

Not to mention banks had a history over decades of not lending to African Americans. In the cases in which they would, they ended up charging higher rates than other ethnic groups. Now the latter has become more prevalent. It's just become more difficult to prove.

While we're on the subject, how about taking a ride through a predominantly minority area and seeing how many banks there are? If you find something other than a Bank of America branch, let me know and I'll eat my words.

@B: Not to mention that they pushed the sub prime loans with vigor. I believe they refer to that as "predatory lending".

If you have bad credit and a low credit score you should be offered a higher rate, regardless of skin color. Banks are in business to make money. When making you a lone they will take into account your credit history as well as how much they can make. All things being equal, if you qualify for a 6% loan and I as a bank or broker working with a bank offer you 7% and you accept that offer then I just made more money on that loan. You as the customer have the choice to educate yourself and not accept that loan. Had the customer taken 30 extra minutes and shopped around they probably could have been offered the 6%. I am sick and tired of all the Rev. Sharptons of the world blaming race for there problems. Perhaps I am biased becasue I am white, but it is time to take a little personal responsibility. If white in this situation make the same accusations they would be laughed out of court.

@LJKelley:

In a perfect world, that would be the case. In reality though, anything that is said, regardless of how true it is, that casts a bad light on any race, is considered racist. Take crime and news reports for example. A lot news stations will no longer say the race of the suspect. They will give every other physical description, but not race. Why is that do you think? It should be the first thing said, as it is the most discerning physical feature. And look at crime reports. Recently many have stopped showing racial statistics. Why? Because they know if they print that the majority of crimes are committed by minorities, they will get sued by one of these NAACP groups. Liberal idiots want to ignore statistics. They want to pretend that they mean nothing, and everyone is a wonderful unique person who is independent in thought and belief. This is BS. Fact is, if 85% of crimes are committed by a certain group of people, then when a new crime of that type occurs, there's an 85% chance that it was done by a member of that group. Let's grow as a society and stop this political correctness crap.

Correct me if I'm wrong...

You're wrong. And congratulations, you can make racially motivated jokes.

@James Babiak: Or maybe you can watch other television networks like CNN. What, are you going to say Michael Steele and Barack Obama are secretly saying "YEAAAAAAHHH BOOOIII" behind closed doors, next?

You're obviously a person who follows stereotypes a bit too much.

I am pretty shocked by how quickly "consumerist" are to believe that these immense and, as recent history shows, basically evil companies are being taken for a ride by african americans. that there is some big black conspiracy to steal our bail out money. cause we all know that racism doesn't exist any more, and certainly hasn't played into mortgages and home ownership in the past...

@TEW: This isn't a completely new story -- the NAACP has been working on this lawsuit for a while.

@James Babiak: Or we could be thinking about how to end discriminatory practices instead of justifying them. And that's not political correctness, that's just plain old fairness and honor.

@Ninja007: Huh? The people we're talking about here qualified for prime loans -- by definition, they aren't risky borrowers.

Not sure about all the details of this, but they don't even allow photos of any people in loan files, so how could anybody determine race?

@James Babiak: You know why they can't discriminate based on race? Because it's illegal.

They can and will discriminate based on anything and everything they are legally allowed to, and race is one of the few things they're not allowed to consider. If you want to argue that, build a time machine.

And stop assuming everyone you're addressing is white.

@Rohini: Names, accents, location. Plus a lot of people still walk into loan offices to apply.

@ James Babiak: If you don't believe me, go into a black community and look around.

You mean, like Ladera Heights in Cali or PG county in Maryland, with their million $$ homes? Or the predominately-Black enclave of grandfathered homes in the Hamptons?

@ceejeemcbeegee: Bachelor at Large: Didn't even think about that one... Ladera Heights is one of the most prominent communities in Los Angeles and Prince George's County is one of the richest counties in the state of Maryland. Coincidentally, both are predominantly African American.

@ ckaught78 : Did you even read the article? These were people with the exact same income, credit score, and qualifications as Whites, but they were offered higher rates and subprime loans.

Now just a minute here... If these people have high credit scores already,it stands to reason that they manage their money pretty responsibly. They pay their bills on time and avoid trap fees and shoddy loan products . In other words,they are not innocent lambs to be plucked by the sharpies in the typical mortgage deal.It's hard for me to believe that these folks would not have done their homework and walked away from a sub prime loan if they qualified for a good loan. Thats why I am calling bullshit on the NAACP for this.

This sounds like more victim creation ("these dolts need us to look out for them").

Sorry,guys, but no matter your color or creed,get competent advice before signing on the bottom line.A shitty loan knows no color...

@Papa Midnight: @ceejeemcbeegee: Bachelor at Large: No one said all black people are from the ghetto, but unfortunately, the fact is that more black people in this country live in the neighborhoods described by James Babiak, than in the well to do neighborhoods described by ceejeemcbeegee. Based on that fact, it would seem logical that on average, black people would get less favorable loans.

@sn1per420: And just to clarify, I'm not saying the claims made by the NAACP are completely baseless, I just have a problem with this particular statistic:

a 2006 report by the Center for Responsible Lending that found black people were 31 percent to 34 percent more likely to receive higher-rate subprime loans.

A lot of you aren't thinking beyond race and income. There are many banks competing to give home loans. What these stories don't mention is that banks have no financial interest in discriminating against minorities. Banks don't just make lending decisions based on income. Ostensibly the bank will own the property for the entire term of the mortgage, so the lending bank has to consider the property itself--its potential to lose value or be ruined by vandalism, arson, or other crimes. If the property is close to a high-crime area, the bank must factor that risk into their loan.

The banks have no financial interest in being discriminatory. if one bank passes up a great loan opportunity just because of someone's race, then another bank can come in and seize the chance to make a good return on a successful loan.

Keep in mind that the NAACP stages protests around inner-city grocery stores that "overcharge" their clientele without mentioning that the stores have to provide extra security against vandals, thieves, and armed robbers.

@ sn1per420 : I'm speaking more to his racist stereotyping, not the mortgage loan process. There are all different kinds of Blacks people, from the ghetto to the White House, just as there are all different kinds of White people from the trailer park to Wall Street. To generalize an entire people by watching too much TV (and no one is arguing that BET isn't horrible) is simply myopic.

And I would also argue that while you are right --that more AAs live in poorer neighborhoods-- the fact remains that these AA in this study had the same credit scores and qualifications as their White counterparts, but they were offered higher rates and less desirable loans. Someone said these people should have just shopped around for a better deal. Perhaps. But the fact that the banks offered these worse deals in the first place based solely on their race is illegal.

@ sn1per420 : Well, these were studies done by 2 different entities, right?

@ceejeemcbeegee: Bachelor at Large: @Papa Midnight:

Give me a break. Ok, I'll play your game. You successfully named THREE predominantly black neighborhoods that are not ghettos. But you stopped after that. Why? Oh, because you ran out of names. Don't be idiots. You know exactly what I said and meant. Most blacks live in the ghettos of towns and cities. Many nice areas of cities turned into the ghetto when blacks moved in and the crime levels jumped exponentially, and all the people with money moved out quick. Property values plummet. It's a cycle. And guess what? It has nothing to do with the color of a persons skin. Maybe that was the only issue 60 years ago, but not anymore. It's the way they act and behave that's the issue. It's not my fault that most blacks don't act and behave appropriately. Maybe the NAACP needs to focus it's efforts away from suing everyone who doesn't give them a handout, and instead focus on teaching black kids to take responsibility for their lives, and to educate them with something other then the crap they watch on TV all day. I don't want to live in the same community as a bunch of drug dealers and gang bangers, coming and going all hours of the night, blasting rap music outside, and doing drugs. Do you? But that's the type of neighborhood that most blacks live in, and enjoy. Do you honestly think the black family you cited, that lives in an upscale community in PG County would want to live in Compton, CA? No. Because it's a cesspool for violence, drugs, etc. You need to get off the liberal podium and wake up to reality.