Search Results for "subprime"
White Recession, Black Depression
Published September 14, 2009 @ 06:00AM PT
Barbara Ehrenreich published her fourth and final NYT column on poverty in the U.S. this week, raising the perennial issue of racial economic inequality. (Our previous coverage of Ehrenreich's pieces are here, here, and here.) From 2000 to 2007, African-American employment and incomes fell almost 3%. Now, as the "Great Recession" has engulfed us all, the unemployment rate among African-Americans is over 15% (compared to less than 9% for whites). The black-white and overall ethnic/racial wealth gap is nothing new, but it is easily overlooked at times of crisis when competing senses of "we're all in it together" versus white racial resentment towards President Obama blind us to the disproportionate burden African-Americans face in economic downturns.
Obama Restores Civil Rights
Published September 01, 2009 @ 07:00AM PT
Good news this morning: the Obama Administration is "restoring" the Civil Rights Division in the Department of Justice - the agency for anti-discrimination enforcement in the areas of housing, voting rights, employment, and so forth. Under Bush, the division was notoriously politicized, with conservative and Christian loyalists with little civil rights experience recruited and charged with prioritizing religious cases at the expense of the division's core focus on racial/ethnic discrimination. Why am I writing about this at Poverty in America? Because discrimination has historically reinforced racial, gender and other forms of inequality in housing, jobs, etc. - leading to the disproportionately high rates of women and people of color living in poverty.
MA successfully sues Goldman Sachs over subprime lending
Published May 12, 2009 @ 01:35PM PT
In the first settlement of its kind in the country, Massachusetts Attorney General Martha Coakley has reached a $60 million agreement with a Wall Street investment bank that helped facilitate the frenzy of subprime lending that saddled so many homeowners with mortgages they could not afford to pay.
Wall Street giant Goldman Sachs Group agreed to reduce the size of subprime loans for some 700 Massachusetts homeowners by up to 35 percent, Coakley said yesterday. The investment bank played a key role in perpetuating sales of subprime mortgages by packaging the loans into securities that were sold to investors, with the proceeds used to fund new rounds of mortgages.
"This is a landmark case. It is one of the few times we've seen somebody who didn't actually originate the loans being held accountable," said Guy Cecala, the chief executive of Inside Mortgage Finance, a mortgage industry newsletter.
Mass. has been investigating the subprime industry for the last two years, starting with mortgage originators and moving on through the chain. Says Coakley: ""We've made the determination, and our courts have agreed, that many of these loans were unfair. They were destined to fail".
Housing advocates lauded the settlement for focusing on financial institutions that played a key part in the nation's housing crisis, which prompted wide-scale inflation in the housing market and then a crash that led to a worldwide financial collapse. At the height of the subprime market in 2006, 82.4 percent of subprime loans were packaged with other loans into securities that were sold to investors, according to Inside Mortgage Finance.
And I'm doubly excited to see an alum from my urban planning department at MIT quoted - Andrew Jakabovics points out that by reducing the loan principal for these 700+ homeowners, they're given a chance to get their "head[s] above water again."
Sometimes I just love my activist blue state!
Subprime Lenders Love the Ladies
Published March 08, 2009 @ 08:30AM PT
I don't think I spend much time here hammering home the ways certain groups are hit harder by poverty than others: children, the elderly, women, the disabled, African-Americans and Latin@s all have abnormally high rates of poverty compared to their national population or access to power in this country. Today is International Women's Day, and I think it's important to consider the ways women - and typically their children - fall into, suffer from, or deal with being poor in this country:
Next week I'm traveling to the Tampa-Sarasota area to visit my retired dad, where the population is to my eye and hippy mind white and elderly and conservative. It's no surprise that the region has some of THE WORST foreclosure rates in the country, given the high percentages of elderly women living there and the reality that they are prime targets of subprime lenders. In fact:
Women borrowers are overrepresented in the subprime lending market according to studies done by both the Consumer Federation of America and the National Community Reinvestment Coalition. Across the economic spectrum, women receive less favorable terms than similarly situated men on home purchase, refinance, and home improvement loans. The studies also show that the gap between women and men receiving subprime loans actually increases as women's income increases.
We may try to cast blame on "minorities" hustling the government, demanding banks give them bad loans, but let's not forget unscrupulous single, middle-class women like myself, who have succumbed to societal/familial pressure to purchase a home as a smart investment, only to find ourselves effectively laid off and struggling to make ends meet less than four years after buying at near the top of the heady bubble. I don't have a subprime loan, but I'm one of the lucky few. When you're castigating all those irresponsible ladies you see in the foreclosure videos circulating around the web, think of me.
Matt has more on women and economic injustice in honor of IWD.
(Photo by sergeant killjoy)
First, Principles
Published May 16, 2009 @ 09:00AM PT
Of all the lessons from our economic downturn, the first, most basic one has not really changed: unless and until we do something to solve the home lending and foreclosure mess, we can’t really hope to climb out of the hole we’re in.
Everybody knows that… right?
Of course, there’s knowing and there’s doing… and unfortunately, while the knowing we have a problem part seems a given, the doing is not so clear.
1 in 5 Americans are Poor
Published August 22, 2009 @ 11:34AM PT
As summer melts away and non-profit organizations gear up for a difficult fall, anti-poverty activists need an accurate picture of just how tough it is out there. Following up on Greg's great post from Thursday that captured the growth of hunger nationwide, we offer now a quick summary of the latest recessionary figures:
- 37.3M people were living below the official poverty line in 2007; 2008 should see another 1.5M added, for a statistically significant growth to 12.7% of the population. Experts anticipate an even worse result by the end of '09, and estimate we could hover around 15% of the population officially considered living in poverty. Even acknowledging how outdated this poverty measure is, we have not counted 1 in 7 people living in poverty since the recession of the early 1990s. And if historical census figures that include the "near poor" are anything to go by, we can expect 1 in 5 people, or 20% of Americans, to be living in or near poverty by the end of this year.
"There Aren't Many Votes in Helping Poor People"
Published June 20, 2009 @ 01:45PM PT
Finally, a bit of honesty from John Edwards, though probably not the sentiment by which the one-time anti-poverty candidate would like to be remembered:
"Meanwhile, in New Orleans, residents who had been foreclosed on after Hurricane Katrina by subprime lenders owned by Fortress Investment Group, a hedge fund that Edwards worked for and invested with, have not received the special assistance that Edwards promised after their troubles were reported by The Washington Post and Wall Street Journal in 2007."
New Orleans is being rebuilt by collective sweat equity, and many a famous face has made a commitment to the city, with varying results. It's no surprise, to me anyway, that Edwards would turn out to be a fair-weathered friend. I never bought his anti-poverty schtick, even as I appreciated his megaphone about the problem. Hopefully his infidelities and generally earned reputation as an untrustworthy scallywag hasn't turned his former fans against the problems allegedly near and dear to him.
NOLA still needs our help, and our work fighting poverty nationwide will never end.
Thanks to NycWeboy for the link.
