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Showing posts with the label Consumer Advisory Council

Last In, First Out....Minority Gains in Homeownership Erode.

According to the New York Times, "After a decade of growth, the gains made in homeownership by African Americans and native-born Latinos have been eroding faster than those for whites, according to a report released Tuesday by the Pew Hispanic Center. The numbers indicate that the gains for minority groups, achieved between 1994 and 2004, were disproportionately tied to relaxed lending standards and subprime loan products, and that those gains are now being reversed. The exception to the pattern was foreign-born Latinos, whose rate of homeownership, while low, has stalled in the downturn but has not fallen.Since 2004, homeownership for all Americans has declined to 67.8 percent from 69 percent. For African Americans it fell to 47.5 percent from 49.4 percent. Latinos had a longer period of growth, with homeownership rising until 2006, to 49.8 percent, before falling to 48.9 percent last year. Homeownership for native-born Latinos fell to 53.6 percent from a high of 56.2 percent in…

FBI Probing 14 Companies in Subprime Lending Crisis

According to Bloomberg, "The Federal Bureau of Investigation is investigating 14 corporations for possible accounting fraud and other crimes related to the subprime lending crisis, officials said.

Neil Power, chief of the FBI's economic crimes unit, wouldn't identify the companies, though he said the cases involve 'valuation-type stuff.'"

We warned about these problems in 1991. In 2001, we worked to create the first investment vehicle designed to address subprime lending problems. Fraudulent valuation is a key component in predatory home mortgage lending.

A key question concerns the lack of early warning from the Federal Reserve Board's Consumer Advisory Council: "The Consumer Advisory Council was established in 1976 at the direction of the Congress to advise the Federal Reserve Board on the exercise of its duties under the Consumer Credit Protection Act and on other consumer-related matters.The council membership represents interests of consumers, comm…