Remember the movie The Sting with Robert Redford and Paul Newman where they set up an elaborate betting parlor to set up a sucker for a big bet? Well that is what the Congressional Hispanic Caucus and the Banking industry did to the Hispanic community in the United States.
You think I am overstating this, think again. I have excerpted a part of the Wall Street Journal’s investigation into this collusion with an amazing article. It shows how the subprime lenders and the desire of the Hispanic Black Caucus set Hispanics up in bad loans that were barely sustainable in good times and down right toxic when the economy turned south.
And do not be surprised when you hear the politicians screaming about the lenders putting these people into subprime loans. The lenders were just following directions!
The Congressional Hispanic Caucus created Hogar in 2003 to work with industry and community groups to increase mortgage lending to Latinos. At that time, the national Latino homeownership rate was 47%, compared with 68% for the overall population. Hogar called the figure “alarming,” and said a concerted effort was required to ensure that “by the end of the decade Latinos will share equally in the American Dream of homeownership.”
Hogar’s backers included many companies that ran into trouble in mortgage markets: Fannie Mae and Freddie Mac, both now under federal control; Countrywide Financial Corp., sold last year to Bank of America Corp.; Washington Mutual Inc., taken over by the government and sold to J.P. Morgan Chase & Co.; and New Century Financial Corp. and Ameriquest Mortgage Corp., both now defunct.
Hogar’s ties to the subprime industry were substantial. A Washington Mutual vice president served as chairman of its advisory committee. Companies that donated $150,000 a year got the right to place a research fellow who would conduct Hogar’s studies, which were used by industry lobbyists. For donations of $100,000 a year, Hogar offered to provide news releases from the Hispanic Caucus promoting a lender’s commercial products for the Latino market, according to the group’s literature.
Read the whole article at WSJ.com.
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I saw this earlier today and thought the exact same thing, Tom. The politicians have been pushing homeownership for everyone — even those who can’t afford it. Now, they’re just trying to pass the blame.
Interesting article, it is too bad to see the greed is effecting everyone.