Sarah Solon

Mark’s Winston Griffith’s “The Myth of the Risky Sub-Prime Borrower” runs on AlterNet

Mark's new piece on AlterNet kicks to the curb the dangerous myths behind the sub-prime mortgage industry and its recent implosion - specially the myth that lower income and minority borrowers somehow "deserve" these dangerous and unfair financial products. Don't miss this 20oz line: "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."

From the article:

"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.

This is a convenient, yet misguided, conclusion to draw from the sub-prime mortgage debacle."

Read the rest of the article here.

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Posted at 4:07 PM, Apr 11, 2007 in Community Development | Fiscal Responsibility
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