Wednesday, August 17, 2011

Eric Holder's Department of Justice: Bankers are Smiling Clansmen?

From the Investor's Business Daily:
DOJ Begins Bank Witch Hunt
In what could be a repeat of the easy-lending cycle that led to the housing crisis, the Justice Department has asked several banks to relax their mortgage underwriting standards and approve loans for minorities with poor credit as part of a new crackdown on alleged discrimination, according to court documents reviewed by IBD.

Prosecutions have already generated more than $20 million in loan set-asides and other subsidies from banks that have settled out of court rather than battle the federal government and risk being branded racist. An additional 60 banks are under investigation, a DOJ spokeswoman says.

Civil Rights Division chief Tom Perez...has compared bankers to Klansmen. Only difference is, he said, bankers discriminate "with a smile" and "fine print." He said this kind of racism, though more subtle, is "every bit as destructive as the cross burned in a neighborhood."

Read the full story here.


Jason Gillman said...

Umm.. isn't this what started the whole housing problem in the first place?

Desiree Paquette said...

Yes, Jason, it is. Historically, this is how the government has worked for the 25 years I have been a real estate appraiser. The government makes new rules at every lending crisis then backtracks on those rules until another crisis evolves, then acts shocked and makes a bunch of new rules, etc... On and on and on.