“How banks were bullied into generating bad loans”
‘Community activists’ employed pressure tactics to secure high-risk mortgages
Posted: April 05, 2009, 7:11 pm Eastern
© 2009 WorldNetDaily
http://www.wnd.com/index.php?fa=PAGE.view&pageId=94031
WASHINGTON – Using tools provided by the federal Community Reinvestment Act, community organizers led by a self-described “banking terrorist” applied bullying tactics to secure high-risk mortgages and to shake down lending institutions for billions of dollars – actions that likely contributed to the “mortgage meltdown” that triggered the worst economic crisis considering that the Great Depression.
That is the substance of a new report by the Capital Analysis Center on the Neighborhood Help Corporation of America headed by Bruce Marks.
“NACA has been accused of becoming overly aggressive and individual,” explains the group’s internet site. “NACA wears this as a badge of honor, leaving no stone unturned and typically hounding CEOs from their shareholder meetings to their homes. The rationale is basic: lenders have a individual and often devastating impact on the lives of the folks who they refuse to offer affordable credit to or take advantage of by means of predatory loans and scams.”
NACA earned that reputation by 1st targeting Fleet Monetary Group of New England, which was accused of lending funds to private mortgage companies that, in turn, lent dollars at “loan shark rates.” NACA filed lawsuits against Fleet and worked with nearby media on disparaging news coverage. NACA’s “shock troops,” identified for wearing yellow shirts, disrupted speeches by bank officials, which includes one by CEO Terrence Murray at the Harvard Business School.
In 2007, Countrywide Bank was targeted. It swiftly acquiesced to demands for a settlement that included a stipulation to restructure its borrowed troubled loans. A year later, Countrywide was insolvent – touching off a string of bank defaults and government bailouts that have expense taxpayers trillions.
“NACA could not operate as it has without the Community Reinvestment Act,” says the CRC report. “The CRA is a federal law, very first enacted in 1977, that banned the genuine estate practice of ‘redlining’ communities, singling out geographical locations where a bank would make no loans. To comply with the CRA, banks had to show that they did not discriminate in creating loans in poor and black neighborhoods.”
Answer by T
Barney Frank
Answer by IgnoranceIsYou
You answered your own question. Certainly it was the last eight years of the Bush administration that failed to correctly monitor and regulate the banking market, Thanks for creating everybody aware of that Fact.
Community Reinvestment LAW, it’s a constitutional law, known as an act. Really no one is at fault for lending crisis, which succumbs to the economic crisis, that you can clearly blame on bush.
i blame the greedy ceo’s of major banks who lent out way too many loans to get a bigger bonus. greed/gluttony is one of the seven deadly sins.
I think it was the people that took out mortgages that they could not afford, and they did not understand the terms.
Last time I checked, it was the responsibility of the borrower to repay the money loaned.
The banks were least of all bullied, they were in fact enabled by Gramm and others as a way of shaming the democratic agenda. In what way does this differ from the general Republican assumption that debts may be forever increased while taxes for the wealthy must be decreased while the rest of us get reamed- please explain this one or forever hold your peace.
You are not reporting anything new. I remember the politicians screaming about banks relining certain areas. Not lending mortgage money to people with low paying job. Claiming it is an American Right.
Well here we are and just like a child they pols shrug their shoulders and say Not Me.
Only six percent of the subprime loans that have been foreclosed on were given out by CRA-affiliated banks, so I don’t think that you can blame this recession on the CRA alone. Both parties failed to address this crisis before it started. It was also fueled by private investors who were playing a game of “hot potato” with mortgage-backed securities. They knew that the bubble was going to burst, so they bought up these subprime mortgages and sold them off quickly for a nice little profit. Once the game was over, the investors and bankers that got stuck with these mortgages suffered a huge hit. There is a lot of blame to go around for this one. Not many folks in D.C. or on Wall Street can claim that they had nothing to do with it.