Weekly Twitter Digest (Link Roundup) for 2013-03-01

About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.


  1. 1
    Scotsman says:

    Wow- I’m usually willing to cut folks quite a bit of slack on the good old “racist” claim, but even by my standards the Bloomberg Business Week cover has jumped the shark. What were they thinking? Were they thinking? Bloomberg? Is this some leftist Freudian slip? It’s not just that all are black- it’s the obvious stereotypical portrayal. Besides, everyone knows there aren’t that many blacks in Kent/Auburn . . . ;-)

  2. 2

    RE: Scotsman @ 1
    The article in Bloomberg Business Week didn’t even have much to do with it’s distasteful cover:

  3. 3
    David Losh says:

    I work in the Hispanic community a lot, and have been getting questions about buying property again, by people who have been foreclosed on, or had a short sale in 2007, 2008.

    They do qualify for loans. They are being solicited to qualify for loans.

    I’m wondering if there aren’t still mandates in place for minority lending.

  4. 4
    Blurtman says:

    RE: David Losh @ 3 – “Hispanics” aren’t minorities. The very characterization is bogus, but even so, not a minority.

  5. 5
    David Losh says:

    RE: Blurtman @ 4

    They were, however targets of minority lending practices of sub prime loans. Bank of America downtown Seattle had a floor dedicated to minority lending, and they employed many people who spoke Spanish.

    Save the definition debate for another time, or place, because you’re right, they will be the majority here in the United States, very soon, like in 25 years.

  6. 6
    redmondjp says:

    RE: David Losh @ 5 – I’m sorry, but that is absolute hogswaddle! Race has nothing to do with it, and stupidity everything. They targeted people who had no business owning a house, period, and were too dumb to understand the terms of the agreement that they were signing. The ubiquitous need to inject race into everything just drives me mad . . .

  7. 7
    ARDELL says:

    “I’m wondering if there aren’t still mandates in place for minority lending.”

    The “targeting” is not about mandates. It’s about Predatory Lending practices.

  8. 8
    David Losh says:

    RE: ARDELL @ 7

    Lenders, as I recall, were supposed to have a per cent of minority loans. You can define minority as you want, but what I’m saying is that past clients of mine who did go through short sale, and foreclosure, have high credit scores, and qualify for mortgages.



    On signing the Gramm-Leach-Bliley Act, President Clinton said that it, “establishes the principles that, as we expand the powers of banks, we will expand the reach of the [Community Reinvestment] Act”.

    In 2007, Ben Bernanke suggested further increasing the presence of Fannie Mae and Freddie Mac in the affordable housing market to help banks fulfill their CRA obligations by providing them with more opportunities to securitize CRA-related loans

  9. 9
    Blurtman says:

    RE: David Losh @ 8 – Are you suggesting the equivalent of an affirmative action lending program?

  10. 10
    David Losh says:

    RE: Blurtman @ 9

    Never my suggestion!

    It’s just in the legislation some place. It’s a hold over from red lining which hindereded lending in certain areas.

  11. 11
    ARDELL says:

    RE: David Losh @ 8

    That was not the case, David, and as you know I was in banking at the time the CRA was enacted. In fact Jimmy Carter who was President at the time CRA was enacted gave a campaign speech just outside my office window on a wooden platform built in the middle of the street just before he was elected.

    To the best of my knowledge, there never was a minority quota or mandate for lending institutions as to lending practices. The mandate was always based on low to moderate income families. If you want to make the leap that low income and minorities are interlinked, you can certainly do that. But there were no mandates or quotas as to minorities in the lending institutions. In fact quite the opposite. We were very “without regard to race” in lending institutions.

    Some people were confused because the Bakke landmark case on reverse discrimination due to mandates and quotas for minorities was decided in the same year that CRA was enacted. That case involved a medical student, but yes, the banking institutions were targeted, in particular by NOW, for their hiring practices with regard to women and minorities. But as to lending, not the case.

    The main reason CRA was enacted was because banks were pulling branches from low income areas. This was partly because of the Automated Teller Machines (ATMs) and my bank was the first bank in the Country to have one. Our ATM was named George. :) When ATMs decreased the need for human tellers, banks started pulling branches out of low income/high crime areas and placing “George” there instead. This left no human person to speak with in those neighborhoods about getting a mortgage or other type of consumer loan.

    CRA was enacted to create a sort of outreach program for low income, and my sister was the one who went to those neighborhood meetings where the branches were pulled. They were like “town meetings” where she explained the “low income mortgage programs” much like the House Key and other income based mortgage programs of today. There have been many in between and my sister has been operating these low income outreach programs since the 70s. In fact she was honored at The White House during the George Bush years for her many years of service to the community regarding these budget counseling and home finance courses for low income families.

    They have have been many and varied over the last 25 to 30 years, but always based on income and not race. Always low income and first time buyer programs and when they are specifically related to CRA they are not for first time buyers only, but always an income to qualify cap.

    Technically a bank who did not pull any branches was not pressured to provide these services, the same way that the ARCH program is mandated in higher income communities without much need to do so in low income communities.

    Hiring practices were about race and mandatory quotas based on race and gender. Lending practices income related only.

  12. 12
    ARDELL says:

    RE: David Losh @ 10

    Another reason real estate agents jump to this conclusion is that the illegal practice of “Redlining” is often lumped together with the illegal practice of “Steering”. They are usually taught in the same class at the same time with the two words often erroneously linked together, as if they are synonyms, by the teacher of the class on Fair Housing.

    “Steering” which involves agents is absolutely about race. “Redlining, which is about lenders and not agents, comes under the broader category of “credit rationing”.

    Redlining is more about the “red area” of high crime-low income resulting in a higher % of minorities being impacted as a result. But the lending practice targeting low income and primarily high crime areas as it’s objective, was about safety. The practice of putting in an automated teller was because of bank robberies and the safety of the tellers and other bank personnel, It was not intended to discriminate against minorities at all, but the net result had that impact.

    Consequently the CRA was enacted “…to encourage regulated financial institutions to help meet the credit needs of the local communities in which they are chartered, consistent with safe and sound operation…” No one can force a bank into unsafe operation and so they devised a counter-balancing solution via these special outreach to low income communities. They could not however force a bank to have a branch in an area where employees might not be safe.

    “Steering” on the other hand where agents only show homes to people of certain races in certain areas and “steer” people to “like-kind” communities IS absolutely about race. The two illegal practices are often, if not always, taught in the same class and sometimes even in the same chapter of the class instruction book. This leads to a bit of confusion on the topic for those who have not been both “bankers” and “real estate agents”.

    As recently as within the last 12 months I have had Open House agents tell my clients while rolling their eyes that “they didn’t belong” in a the neighborhood of the Open House. Of course I was not present and with them at the time. There really need to be more “testers” in the real estate industry, even in this day and age, to prevent discrimination. What good are the laws if no one is milling around inconspicuously as a “tester”. We are told there “may be” testers…but really. Where are they?

  13. 13
    Blurtman says:

    RE: ARDELL @ 11 – Great review! And that is the way programs should work, that is, to help all disadvantaged people, irrespective of race. Unfortunately, that is not how affirmative action works, and so a disadvantgaed non-minority typically gets screwed.

  14. 14
    David Losh says:

    RE: Blurtman @ 13RE: ARDELL @ 12RE: ARDELL @ 11

    Well, Ardell, those are very nice stories, and I also have several.

    The fact still remains that lenders are asked to show an outreach to low income borrowers. A phone solictor can go down a list of prospective home loan borrowers, and choose the names that may correspond with a second language the solicitor speaks.

    That’s just a reality.

    Redlining, and sterring both were minority based practices. They can gussy it up all they want about crime, but it came down to neighborhoods of minority concentrations.

    You never addressed my original speculation that lenders are now going back into the same pool of buyers who have lost homes. In my example it is people in the Hispanic community.

    I’m also wondering what Bernanke means by: “the affordable housing market to help banks fulfill their CRA obligations.” What obligations?

  15. 15
    ARDELL says:

    RE: Blurtman @ 13

    That was the basis for the Bakke case. The med student sued because minorities with lesser qualifications were being accepted for two years, while he was not. Bakke won. It was THE landmark reverse-discrimination case. I still remember the picture on the cover of Time Magazine from 1977.It was 4 years after the biggest landmark case of Roe vs Wade, but had almost the same national attention and impact. UC Davis Med School in CA.

    “Bakke’s qualifications (college GPA and test scores) exceeded those of any of the minority students admitted in the two years Bakke’s applications were rejected.”

    It’s an interesting case. I do remember the Bank HR department wondering if they could count me in their quota when I had a super dark tan in summer of 1975 or so. :) But no…dark Italian girls who are only dark in summer and not winter apparently didn’t qualify. haha.

    The other landmark case I was hugely involved in as to aftermath was The Girard College case from the late 60’s. I was still in high school when it happened, but given I worked at Girard Bank on private discrimination issues, that was also a very interesting case, and not really the outcome people think it is, from an historical perspective.

    Lots of good “landmark cases” in the 70s. 80’s we had Mary Beth Whitehead and the case involving the rights of surrogate mothers.

    What are the huge landmark cases since the 80s? There must be some I just can’t think of at the moment. Maybe it’s time for one. They usually follow recessions. :)

  16. 16
    ARDELL says:

    RE: David Losh @ 14

    David, you are mixing up Predatory Lending practices with Redlining. They are basically opposite…not the same.

    If you are making the leap that low income equals protected classes, you have to make that leap alone. I lived in a redlined area…I grew up in a redlined area…I am not a protected class. To assume the two go hand in hand…is a leap that is discriminatory in the thinking, when you take that leap. That a higher % of minorities are impacted is not the same as targeting.

    No…I don’t think there is a list where people skip the names that don’t sound like minorities. In fact in this day and age it’s almost ludicrous to think that, given most of these calls are computer generated or handled by telemarketers who would not be doing that or trusted to keep “the secret’ if they were instructed to do that.

    I did see the “secret” point sheets from 1973 before RCA where the banks were smart enough to tell employees not to keep those point sheets out in the open, but not yet mandated to get rid of them. That had more to do with discriminating against single women trying to buy homes than minorities though.

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