A Country of Assholes

Seriously, where we get off lecturing people on how to run their societies, I really don’t know.

Researchers at Princeton say that without segregation, the expansion of these subprime loans, and the subsequent economic crash, couldn’t have happened. Mortgage brokers needed swaths of communities where people met the following criteria: 1) they didn’t already have a home loan, 2) they were used to predatory lending practices, and 3) there weren’t other financial institutions around to clue buyers into the fact that these subprime loans weren’t a good deal.

Segregated communities like those on the South and West sides of Chicago fit these requirements to a T. Segregation put all these vulnerable people in one geographic location. Mortgage lenders didn’t have to hope the right person would stop by their office. They could set up shop in a place where there were thousands of available customers.

But all those poor people should have known they couldn’t afford a house! Stupid people.

A.

9 thoughts on “A Country of Assholes

  1. whet moser says:

    I know that anyone who knows me is sick of hearing me say it, but READ “FAMILY PROPERTIES” BY BERYL SATTER. It’s about that, and amazing.

  2. hoppy says:

    This misses an very important fact: at the time this was going on, real estate prices were going up at a rapid rate, so any home purchase could confidently be made with the expectation of selling a few years later for a massive profit. Banks used that universal expectation to convince people that they could easily refinance those unaffordable mortgages before the payments went sky high. Ordinary people had no reason to believe the banks were criminal enterprises, which they were and still are, as evidenced by their foreclosing on mortgages they don’t even own, nor do they know who does own them.

  3. montag says:

    Considering that decades of redliningcreated the segregation that then made this sort of predatory behavior possible, one has to conclude that there’s been a concerted effort, decades long, to suck money out of an already poor demographic.
    Since ACORN was the only consortium of public interest groups addressing and publicizing this problem, it was necessary to get rid of them.
    Predatory capitalism at its most efficient…

  4. pansypoo says:

    they couldn’t stop stealing.

  5. paul says:

    Watch the right wing spin this as “we were right about the Community Reinvestment Act”. It’s also (as the princeton people point out) only a part of the story, because it wasn’t/isn’t just the subprime market that tanked. Subprime was where the incentives for mortgage brokers and finance companies to commit fraud were most obvious (because you got more money for steering people to more expensive loans) but fraud was perfectly profitable for plenty of “prime” mortgages too. (Subprime refers to loans that carry a higher interest rate specifically because of the supposed higher risk of default; it’s orthogonal to the crap like ARM, option ARM and so forth.)

  6. Tom Allen says:

    Rule #2 of ripping someone off is blaming them for being stupid enough that they let you rip them off. What, like you’re supposed to trust fellow human beings?

  7. MapleStreet says:

    Thanks for posting. I never would have thought of this.

  8. OkieBlue says:

    You have to beg, borrow or steal a copy of “The Big Short, Inside the Doomsday Machine”. After reading that you will understand the immensity of the greed on Wall Street and that the homeowners were played for suckers.
    I could not put this book down. Caution: It will make you very mad.

  9. Interrobang says:

    Lying to people and treating them like shit doesn’t hurt either when you’re trying to rip them off, and I’m damn sure segregation didn’t make it more difficult for rich white people to lie to and treat poor black people like shit… Don’t forget that a lot of those subprime lenders lied to, manipulated, and bullied their borrowers.

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