Curious tale from the New York Daily Post.
PERHAPS the greatest scandal of the mortgage crisis is that it is a direct result of an intentional loosening of underwriting standards - done in the name of ending discrimination, despite warnings that it could lead to wide-scale defaults.
At the crisis' core are loans that were made with virtually nonexistent underwriting standards - no verification of income or assets; little consideration of the applicant's ability to make payments; no down payment.
From the current hand-wringing, you'd think that the banks came up with the idea of looser underwriting standards on their own, with regulators just asleep on the job. In fact, it was the regulators who relaxed these standards - at the behest of community groups and "progressive" political forces.
And while such foolish, politically-correct lending, was perhaps done with the best of intentions, it will all backfire. Not just on the wider world, but on the minorities themselves.
For who will suffer most from higher interest rates, but those incomes groups whose finances are under the most sever pressure- but minorities.
And if the credit crunch causes a global recession, I guess the poorer browner countries will suffer most.
Isn't political correctness wonderful- harming those it aims to help most!
Hat tip Iain Dale.
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