Now Banks Sued for “Reverse Redlining”
As a lawyer for ACORN, Obama exploited the Community Reinvestment Act to inflict race-based extortion on the mortgage industry, helping to bring about the collapse of Freddie Mac and Fannie Mae, which led in turn to our current economic crisis. Now the same racket is setting it sights directly on Wall Street:
In what is apparently the first legal action of its kind, an association of community-based organizations has filed a federal civil rights complaint against two of the three largest Wall Street rating firms, charging that their inflated ratings on subprime mortgage bonds disproportionately caused financial harm to African American and Latino home buyers across the country.
The complaint, filed by the National Community Reinvestment Coalition, alleges that Moody’s Investors Service and Fitch Ratings enriched themselves by assigning high ratings to bonds backed by mortgages “that were designed to fail” because of “unfair payment terms and insufficient borrower income levels.”
The firms “knew or should have known” that subprime loans disproportionately were marketed to minority consumers — a process known as “reverse redlining” — and that those borrowers would ultimately default and go into foreclosure at high rates, according to the coalition’s complaint.
If a minority wants a loan, lending institutions must provide it, regardless of the likeliness it will be repaid, or get sued for “redlining.” If they do give the loan, and it has to be foreclosed on, the lenders get sued for “reverse redlining.”
Why not cut out the lawyer middlemen and just order banks to hand over free money to anyone who isn’t Caucasian?
On a tip from Al C. Cross-posted at Moonbattery.