I was watching a financial home on CNN Money tonight where they brought up an interesting concept. Years ago in real estate there was a term called "redlining" which meant that some minority areas were marked off as a bad area to make loans, and that made it difficult if next to impossible to obtain financing. These are referred to as "Sub-Prime Loans!" In the early part of this new century the push came on to make homeownership more affordable for minorities. The request from Washington Dc was to increase home ownership for those that were left behind and increase their portion of home ownership up over 5% by 2010! It sounds like a great idea, but in reality it changed the American Dream into a night mare by providing risky loans to persons that did not even understand what they were signing! No Money? No Job? No Problem! Reverse redlining making homeownership where not available before. But was this not taking advantage of minorities that did not understand the complexities of the documents they were signing? It is a concept that took advantage of persons that could normally not buy a home before. It took advantage of the minorities that with in a short while could not afford to repay! Predatory lending! Countrywide mortgage even boasted on its own website #1 minority lender! What is sad is this was known on the front side of the mortgages that this was an inevitability that the loans would fail! These knowingly bad loans were then sold off as securities and sold around the world as Collateralized Mortgage Obligations CMO, Securitized Mortgage Obligations SMO which have now place the banks of the world at risk! It was a suckers rally and an addiction to money that would never materialize and created a global PONZI scheme built on greed and an increasing need for more appreciation of property values. City governments, schools, pension funds invested heavily into the instruments. The entire scheme was predicated on ever increasing home values and another buyer to bail you out of the home. The problem is the buyers started to disappear as folks started to question the insanity of the times. Then the foreclosures began to pull down the curtain and allow us all to view the reality of the current market. Too little regulation and too much money was lent to prevent the train wreck. We are now just seeing the begining of the damage.
So my thoughts how come there has been no outcry of taking advantage of the minorities? This may have been one of the biggest injustices to the poor and minority citizens in this nation. Yet, there is no talk from any political candidates, no presidential candidates are speaking about the real issue, NAACP, the National Asociation of Realtors, and many other minority groups! It is a hot potato that no one wants to touch! Historically, this will be viewed as the largest perpetration of criminal fraud that started with taking advantage of minorities, and building one of the worlds largest lies that assets bubbles can only go higher, that only a fool would not buy into it, and no one can lose! It could lead to a major recession or worse - yet no one is calling it for what it really is!
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James Crawford ABR, Broker Associate
Atlanta Real Estate Agents, Alpharetta GA Homes for Sale, Atlanta Luxury Homes, Dunwoody GA Homes for Sale, Atlanta Real Estate & Atlanta Homes for Sale, Gwinnett Homes for Sale, Atlanta Real Estate Blog, Cumming GA Homes, Decatur GA Homes for Sale.