And this sequel is being released before the original has even ended.

Investors Business Daily:

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.

Not loaning money to people who won’t or can’t pay it back? What a horrible crime!

Here’s the “Chicago way” element: Don’t tell anybody what we’re doing, or else:

As part of settlement deals, prosecutors have required banks to sign “nondisclosure agreements” barring them from talking about the methods used to allege discrimination. Bank lawyers contend the prosecutors are trying to hide the shaky legal grounds on which the cases are built. “It’s horrible what they’re doing at the civil rights division,” said Reginald Brown, a partner at Wilmer Hale in Washington, who has represented banks in connection to recent race-bias investigations. “They don’t have any proof, just theories.”

He added, “They want you to sign something saying you agree, under the condition of any settlement with them, that you won’t disclose what their theories were. That’s because their theories are loopy and wouldn’t stand the light of day.”

One such theory — “disparate impact” — holds that merely a difference in loan application outcomes is enough to prove racial discrimination — even if no intent exists on the part of loan officers to contrast based on the color of applicants, and even legitimate business factors — such as credit scores and down payments — help explain disparities in loan outcomes between white and black applicants.

Under this broad theory, banks have been accused of racism simply for failing to open branches or aggressively market mortgages in black neighborhoods — regardless of the demand for, or viability of, such loans in those areas.

Welcome to Shakedown City. Population “You.”

Comments

11 Responses to “Justice Department Determined to Make a Sequel to the Housing Crisis”

  1. SignPainterGuy on July 9th, 2011 3:39 pm

    This whole mess is at the core of the recession snowball we`re experiencing and these bastages want to double-down on it ?! It`s beyond criminal on many levels !

    I wish these bankers would secretly record, copy and document all the crooked dealings and go public using every media form….go viral with it. And dare these thugs to retaliate !

  2. Joe Redfield on July 9th, 2011 3:41 pm

    If at first you don't succeed(in destroying the economy), try, try again.

  3. SignPainterGuy on July 9th, 2011 3:57 pm

    I`m thinking they`re "sucking till they do suck seed" !

  4. Hugo Chavez on July 9th, 2011 3:59 pm

    The US Justice Dept should be prosecuted under RICO. It is a criminal enterprise.

  5. joyannaadams on July 10th, 2011 2:17 am

    And when President Bush came out and said, he wanted everyone to have a house so they could share in the American dream…we didn't know he meant giving homes to half of Mexico.

    But then again…none of us were watching our Presidents speak on all the Spanish channels, where they were probably saying in Spainish: . "HOLA! COME ON DOWN! FREE HOUSES! NO MONEY DOWN! BRING YOUR RELITIVES!

  6. Marshall_Will on July 10th, 2011 2:41 am

    Joyanna,

    One of the most hijacked, spun and misdirected phrases in the HISTORY of The Professional Left Blogosphere. When GWB referred to "The Ownership Society" his focus was primarily BUSINESSES!

    That -legal- immigrants and Americans from all walks of life would be able to pursue their dreams of independence free from entitlement programs and invite themselves into the fold of upward mobility.

    I mean, -think- about it, how many successful people do we know that don't even own their own home..? Home ownership is a basic "building block" toward much, MUCH greater accomplishments! It's a first step ( not the end-all-BE-all? )

    I'm no GWB water-carrier by any stretch, but that phrase of his lie largely dormant until AFTER the Housing Bust! When it served TPL's "Whom EVER 'we' elect NEXT isn't responsible!" narrative.

  7. Marshall_Will on July 10th, 2011 3:01 am

    Update:

    'I' have, we ALL have friends or relatives that have broken from 'convention' and attained enormous success without homeownership ( spouse/HS Diploma/So Much As COMMON SENSE! )

    Those that have DEFIED the odds, beaten… "The Man" all from their rented 2 br. apt in Vancouver, WA. THEN there's the other 99.9% of us? The founder of Fred Meyer Food Stores was (1) ONE! of them. He lived in a studio apt. in Portland and bagged groceries even after Kroger's tendered a buyout offer.

    Les Schwab is another notable ***Exception***. ( Or wasn't I emphatic enough? ) The ENTIRE Tax Code is structured to benefit Home Owners. In fact when examined carefully, the liklihood of sucess -without- is so astronomical it doesn't even rate a rounding error? My father, YOUR father would have ref'd to this as simply "getting -both- oars in the water". Think Pre-Internet/Youtube 'instant' sensation.

  8. cdl on July 10th, 2011 11:40 am

    Pretty soon you'll be called a racist just for turning a profit. It won't matter what your business.

    Liberals/progressives think business owners are only supposed to make enough money cover all their costs and have just enough left over for themselves so they won't have to live on foodstamps. If they have enough left over to own say…a…Cadillac Escalade they are greedy bastards that need to have their bank accounts seized and all their ill-gotten money given "back" to their employees.

    (Is it obvious that I have a liberal/progressive brother-in-law that I have to hang out with occasionally?)

  9. joyannaadams on July 10th, 2011 3:11 pm

    Gee Marshall….I actually remember Bush saying it…in actual time, and theLAST thing I got from his statementwas that he was talking about 'business'.George W., and his brother Jeb, have always been for helping out the poor Spanish people here, legally and illegally. At least, that's how I always took their statements. It was George W. that signed the North American Treaty with Canada and Mexico, which if you have read any of it..is a road to the merger of the three countries into one “North American Continent.” But you are right that the left media has used that statement of Bush's in order to blame Bush for the housing bust. It's dirty politics, because it was Barney Frank, a democrat, who had and STILL has the money purse of Congress, and who facilitated the whole (tell the banks to loan to everyone) mantra, which, spiraled the whole world into collapse, according to many of the financial experts. Nobody says: they are all guilty. And according toMichelle Malkin,it was mostly loans to the poor Spanish that broke us. Joyanna Adams

  10. SignPainterGuy on July 11th, 2011 12:44 am

    I could have sworn it was Der Schlickmeister`s signature on the NAFTA agreement, but I could be wrong. Barney Frank, Chris Dodd, Franklin Raines, Jimmy Carter and again, Slick Willy, among others, are who created the whole sub-prime loan mess. It was the dems who set the thing up "for minorities", which we all know translated to BLACKS ! The republicans saw what was going on, decided it was a great way to buy votes, and offered the same deals to the Hispanics…..

    Nobody is correct : they ARE all guilty !

  11. Daily Dive 11 July 11 | adeliemanchot on July 11th, 2011 10:44 am

    [...] Justice Department Determined to Make a Sequel to the Housing Crisis [...]

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