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This already happened with predatory lending and sub-prime mortgages.
by new_hackers 10y ago
This already happened with predatory lending and sub-prime mortgages.
- iamdave 10y agoUnless I misunderstood various explanations of the sub-prime crisis, this is a Mount Olympus sized characterization is it not? "Favorable terms" doesn't implicitly mean a repeat of the multivariate conditions that caused the housing collapse, just as the housing collapse can't be strictly pinned on "favorable" mortgages. Welcome to correction here from a more informed perspective.
- new_hackers 10y agoI'm saying that there at one time was a business opportunity for someone who wanted to setup a lending company that offers black families fair and favorable terms on mortgages. (Granted, there may be some gray area on 'fair and favorable'). Partially because of Fannie Mae and Freddie Mac and the Community Reinvestment Act, banks were incentivised. Black families were targeted by predatory lenders who knew the rules well enough to get the loans for the individuals, individuals who perhaps were not in an economic position to be able to fulfill the agreements of the loans, then resell them in mortgage backed securities. At the micro level, the Community Reinvestment Act was "a good thing". We as a society want everyone to have a home. However, it did have negative consequences at the macro level. So there was a business opportunity at one time. Is there today? I don't know. And yes, it was probably an over-characterization.