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by Yvette Carnell
The subprime mortgage bubble was a scam created by Wall St. to bring in billions by bundling mortgages and selling them as triple A rated securities. The Wall Street con game created a product with no real value, which they traded to unsuspecting pension funds in order to make a quick buck.
And since every con game needs a mark, Wall St. decided that the easiest mark was the African American community, and took many black homeowners and buyers for a costly ride.
The American Civil Liberties Union is now suing Morgan Stanley over that discrimination:
The lawsuit, filed in U.S. District Court in New York, is the first that connects racial discrimination to the securitization of mortgage-backed securities, which were sold to institutional investors and pension funds. It is also the first case where a prospective class of victimized homeowners is suing an investment bank directly rather than the subprime lender whose loans the bank bought.
The giant banks didn’t care whether or not a loan could be repaid because as soon as the paperwork was done, the bank could sell it as a security and p**n it off on the next unsuspecting investor.
Lost in this conversation, though, is the role black leaders played in the subprime mess. Tavis Smiley had a relationship with Wells Fargo, one he eventually severed, which was used to herd black people into subprime mortgages.
And even Jesse Jackson has been criticized for his role in bullying banks , calling those banks that didn’t loan to equal numbers of blacks and whites racist. This helped usher in the sub-prime mess because it changed the metrics and encouraged regular banks to enter the sub-prime loan arena, thus paving the way for sub-prime lenders off all sorts to play a larger role in lending.
But since this plan was hatched in the 90s under the Clinton administration, it seems that all is forgotten and forgiven. Now Jackson can rail against the wrongs of the mortgage industry with no one even batting an eye. But going forward, blacks should remember who cosigned on these subprime arrangements and how badly they ended. Everything ain’t always the fault of “The Man”, and even when it is, if you delve deep enough, you’ll find that “The Man” had a little help from “The Black Man.”