BC, while you and I may have different political views on certain issues, I've always had a good deal of respect for you and your opinions. And so, I see and treat you in a
very different way than say, Fisher (who is a certified idiot and low brow moron). So take this as it is meant: I don't want to see you repeating urban myths that are false (or barely half true), but get passed off as facts. OK? I will not make this correction into one of my overly long, tiresome posts, as I'm sure people are sick of reading paragraph after paragraph after paragraph from me.
Citi was accused of redlining -
the exact same charge that was made against the bank that I worked for after we sold our mortgage company to Credit Suisse in the late 80's. The bank that I worked for decided to settle the claims made against us by state AG's (because we were guilty) and Citibank settled out of court with the class plaintiffs in the case against them. No one was or has ever been
forced to make loans to "unqualified minority borrowers" by the government or anybody else. I'm sorry but that just did not happen. That is completely untrue. Other than correcting Danica P@trick fans on racing forums over claims that she had a successful F1 test (with Honda, so they claim), this is probably the other topic that I have corrected people on the most. My bank did not enter the subprime market following our settlement. And Citibank didn't
have to enter the subprime market either. All they had to do was not violate the law by engaging in illegal, discriminatory practices. The bank that I just refinanced with last week
never offered the first subprime or Alt-A mortgage. The banks that did enter the subprime market did it for the same reason that I would often guarantee rate locks, but then trade the market to "buy" the funding at a lower rate and profit from the spread
(sometimes I would win, sometimes I would lose - just like stock or bond trading):
we did it for money.
That is why bankers do what they do, Blue Countach. Citi, Chase, Wachovia, Wells and many/most of the other big banks literally
demanded that associated mortgage companies feed their pipelines with any mortgage that they could write, so they would have paper to package and resell. I offered a detailed explanation some months back, which I won't repeat, but mortgage bankers (doing the same amount of work as with a prime/conforming) made fees off of subprimes that were often 500%+ greater than those on prime/conforming mortgage originations... and the banks (yes, through Fannie and Freddie as well as on the OTC) had a willing market, with hogs just waiting to eat whatever they threw at them. Money. Mortgage bankers made huge sums on the front end and investment bankers made huge sums on the back end. And you don't have to force a banker to make money. If I hadn't been cursed by my parents and God with a conscience, I would have stuck around for another decade or so, and I'd probably be sitting in a 10,000 sqft house now, being fed figs and ripe pears by topless, busty, curvy handmaidens and trying to decide if I was going to drive the Aston DBS today or the Bentley GT. But I have my sanity and self-respect (and the respect of my family), so I determined that my soul was worth more than any amount of money. :hatsoff:
But yes, FNMA, FHLMC, the Fed and Congress did have a hand in facilitating this crisis. But Obama's
extremely limited participation in the Buycks-Roberson case had no more to do with the housing and mortgage crisis than my post-lock rate trades.
Simple message (which as an attorney, you may already realize):
Don't... don't... don't believe the hype. Don't believe the hype.
Don't believe me? Here's a further analysis from Snopes:
Snopes: Barack Obama Required Banks to Lend Money to Poor People (Mostly False)