HUD Sec'y Alphonso Jackson: Blacks and Hispanics Fear of Banks led to mortgage crisis

Yesterday HUD Secretary Alphonso Jackson claimed that minorities fear of banks is what led to the subprime crisis. From yesterday's Chicago Sun Times titled "HUD Sec'y: Fear of banks led to mortgage crisis"

One-third of the nation’s mortgage foreclosures probably could have been avoided if black and Hispanic home buyers hadn’t been so afraid to borrow from banks, U.S. Housing and Urban Development Secretary Alphonso Jackson said today.

With painful memories of the redlining that went on during the 1950’s and `60’s, minorities fearful that they would be denied home loans steered clear of banks, Jackson said.

SNIP

Instead, they took their business to mortgage insurance companies that are totally unregulated and mortgage brokers with some regulation, but nowhere near as much as banks.

“When we walk down to Northern Trust, Bank of America or Chase and they say, ‘We have a five-year mortgage,’ we know that because they’re supervised by federal regulations. But, the mortgage insurers and the mortgage brokers would tell you anything—anything. And all of the sudden, they’re out of the picture once they sign the loan,” Jackson said.

“We’ve got to get to the point—and a lot of times people don’t want to talk about this — where blacks and Hispanics go to banks and stop being afraid. … There’s always been a taint of suspicion that banks would not make the loans. Maybe back in the ‘50’s and ‘60’s, that was true. We know we had great redlining at that point in time. That’s not the case today. The Truth in Lending Act, the Community Re-Investment Act — make it clear banks have an obligation to work with low- and moderate income people.”

SNIP

Jackson offered his candid assessment of the mortgage foreclosure epidemic after joining Mayor Daley at Tuley Park Fieldhouse, 501 E. 90th Place, site of the fourth of nine “Borrower Outreach Days” designed to assist homeowners in danger of losing their homes.

Comments

[mrstrailerco]

What a effing tool. Does he go on to tell us about all the ways those so-called good banks screw us over? And by "us" I mean all their consumers. Chase Bank is particularly noxious. A young friend of ours overdrew his checking account, and everytime he checked his balance, both online and at an ATM, they charged him another $35. He was over $200 in the hole by the time he figured out what was going on. And there was a daily charge for being overdrawn.
Hey Alphonso, how about you get these guys to just charge once for a bounced check?

[Hap Haploid]

I just knew it was the fault of all those poor people. Isn't there some way we can just get rid of all them?

[Hap Haploid]

I just knew it was the fault of all those poor people. Isn't there some way we can just get rid of all them?

[getaclue]

Yes, and we all know how the banks were falling all over themselves to lend money to blacks and hispanics!

The lucridity of this man's comments is chokingly dumbstriking.

[MapleStreet]

Could someone help me understand what he said.

How does the hesitancy of people of color to go to banks explain all the people of WASP-ishness who got caught by foreclosure ?

Considering the history of overt Jim Crow laws converted to more occult redlining converted to even more occult racism, why is a person of color wrong when they learn from their experience ?

Knowing that I'm white, and all the home financing spams I got, in most cases were the spams sent to poor blacks ?

[MapleStreet]

The more I think about it, it seems that the secretary's words are self damning. Specifically, wouldn't one think that HOUSING AND URBAN DEVELOPMENT would be in the busniess of helping their clients get homes ?

[Michael]

Well, I guess there's a bit of consistency: two and a half years ago wingnuts like Gingrich and Santorum blamed the victims of Katrina, Rita and the flood. Today, wingnuts like Jackson blame the victims who are being inundated in a sea of red ink.

[Jerome]

This is as inaccurate as can be. Black people, once again, were denied left and right even these horrible loans. If you go online and check the names on these houses that have forclosured I promise you the names are largely hispanics, asians, and middle eastern, NOT american and surely not BLACK americans. As a black man, I've watched this market daily and have been blessed to recently buy the same house we feel iin love with and decided to wait. The house went for $800k and I just picked it up for just under $400k.