However, "red-lining" was a myth. The people who were being denied loans were those with no credit and no way to repay. Nonetheless, what a wonderful opportunity for the Democrat Party to press its creds as the party who protects minorities from alleged "racism"!
Christopher Booker of the U.K. Telegraph summarizes Obama's conceit on the matter, quoting from his State of the Union speech:
“The house of cards collapsed,” he recalled. “We learned that mortgages had been sold to people who couldn’t afford or understand them.” He excoriated the banks which had “made huge bets and bonuses with other people’s money”, while “regulators looked the other way and didn’t have the authority to stop the bad behaviour”. This, said Obama, “was wrong. It was irresponsible. And it plunged our economy into a crisis that put millions out of work.”Obama is the personification of Democrat dishonesty. They create a major recession through governmental malfeasance, then blame it on the victims of their own bad behavior, i.e. the banks and mortgage companies. Hence we have Obama promising to create a governmental "mortgage fraud" unit to investigate such matters. They ought to start with Obama himself. As Booker writes:
I recalled a piece I wrote in this column on January 29, 2009, just after Obama took office. It was headlined: “This is the sub-prime house that Barack Obama built”. As a rising young Chicago politician in 1995, no one campaigned more actively than Mr Obama for an amendment to the US Community Reinvestment Act, legally requiring banks to lend huge sums to millions of poor, mainly black Americans, guaranteed by the two giant mortgage associations, Fannie Mae and Freddie Mac.The recent outrage against Bank of America underscores the cynicism of the Democrats. Bank of America was forced to pay $335 million to settle the government's charges that its Countrywide lending unit engaged in "predatory lending" practices, i.e. convincing black borrowers to enter into real estate loans that they couldn't afford to repay. So Countrywide was forced to make bad loans to blacks by the federal government, and now is excoriated by that same federal government for doing what they were told. The Democrats create a mess, then require their victims to pay for it and take the blame. Disgusting.
It was this Act, above all, which let the US housing bubble blow up, far beyond the point where it was obvious that hundreds of thousands of homeowners would be likely to default. Yet, in 2005, no one more actively opposed moves to halt these reckless guarantees than Senator Obama, who received more donations from Fannie Mae than any other US politician (although Senator Hillary Clinton ran him close).
Read Christopher Booker's article today, "How I Woke Up to the Untruths of Barack Obama."