I don't have much commentary to add, except to say, to all those who wonder "Why we don't blame the borrowers": please stop. The borrowers you speak of are speculators and flippers. People who could afford to commit the fraud you speak of. Primary residence owners are not the culprits in this mess. They are the victims. This was systemic pillaging and fraud committed by Federally backed institutions.
"We just went right after them,"said Ms. Jacobson, who is white and said she was once the bank’s top-producing subprime loan officer nationally. "Wells Fargo mortgage had an emerging-markets unit that specifically targeted black churches, because it figured church leaders had a lot of influence and could convince congregants to take out subprime loans."
Yet, another reason for a separation of church and state(and commerce). Please, keep the money changers out. It's also reminiscent of the slave traders who would contract with the dominant African chiefs to harvest laborers from their regions.
Loan officers, she said, pushed customers who could have qualified for prime loans into subprime mortgages. Another loan officer stated in an affidavit filed last week that employees had referred to
blacks as "mud people" and to subprime lending as "ghetto loans.
"
Shameful and sickening. Sickening.
And people wonder how a person of color could have the "gall" to claim more intimate knowledge of such things than an average white male justice.
The New York Times, in a recent analysis of mortgage lending in New York City, found that black households making more than $68,000 a year were nearly five times as likely to hold high-interest subprime mortgages as whites of similar or even lower incomes. (The disparity was greater for Wells Fargo borrowers, as 2 percent of whites in that income group hold subprime loans and 16.1 percent of blacks.)
FINANCIAL PRODUCTS SAFETY COMMISSION
The idea of the Commission is based on the model of the Consumer Product Safety Commission, which doesn't care about a company's campaign donations when it considers lead paint in toys. They don't care about a Fed Chair's legacy, a company's books, or it's pension plan, or it's OSHA infractions, or it's HR filings: all they care about is the end product and its danger to the consumer. If an item's dangerous, they recall it.
...The agency has the authority to develop uniform safety standards, order the recall of unsafe products, and ban products that pose unreasonable risks. In establishing the Commission, Congress recognized that "the complexities of consumer products and the diverse nature and abilities of consumers using them frequently result in an inability of users to anticipate risks and to safeguard themselves adequately."
Insert "the complexities of financial products and the perverse nature of institutions providing them" and begin to see why such a commission is needed. And it isn't just the infinitely insane inventions and evolutions of the industry that give pause. It's also the various physical and legal jurisdictions. For example, products aren't regulated based on what they are, so much as who provides them.
The subprime mortgage market provides a stunning example of the resulting fractured oversight. In 2005, for example, 23 percent of subprime mortgages were issued by regulated thrifts and banks. Another 25 percent were issued by bank holding companies, which were subject to different regulatory oversight through the federal system. But more than half–52 percent, to be exact–of all subprime mortgages originated with companies with no federal supervision at all,
Warren points out this results in 1. greater loopholes and 2. regulatory arbitrage - because an agency will be loathe to crack down when an entity can simply morph or move from its jurisdiction; reducing the potency; and therefore, the necessity of that agency.
People may complain about the costs of such a commisssion:
The evidence clearly shows that CPSC is a cost-effective agency. Since it was established, product-related death and injury rates in the United States have decreased substantially. The CPSC estimates that just three safety standards for three products alone–cigarette lighters, cribs, and baby walkers–save more than $2 billion annually. The annual estimated savings is more than CPSC’s total cumulative budget since its inception.
Imagine what a FPSC would have saved us.
