Money lending institutions have tarred entire segments of the population as credit unworthy through the mortgage industry's own discriminatory, irresponsible -- and now reckless -- behavior.Every major paper is running some variation of the same major story: the sub-prime, "exotic" mortgage market is in trouble.
High priced mortgages that include funky gimmicks -- like adjustable rates or no verification of borrower income -- have resulted in record setting foreclosures and a rush by Wall Street to divest from the sub-prime market. Sub-prime loans comprise only 13% percent of outstanding mortgages, but they contribute to over 60% percent of foreclosures.
Some analysts suggest that sub-prime lenders are being punished for giving high-risk loans to borrowers in low- and moderate-income neighborhoods and communities of color, people, they say, who perhaps never should have received a loan in the first place. After all, their logic follows, not every American can handle the responsibility of credit and owning a home.
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