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jerryking : subprime   6

Opinion | The American Dream Isn’t for Black Millennials
Jan. 5, 2019 | The New York Times | By Reniqua Allen. Ms. Allen is the author of “It Was All a Dream.”

....I marched up to my new, small, one-bedroom apartment on the Hill, satisfied. It felt as if I’d broken barriers.

But when I got a notice in the mail about five years after I closed, I felt dizzy. It was not long after the financial crisis. The letter said that my mortgage company had been charged with giving subprime loans to black and Hispanic people around the country and asked if I wanted to join a class-action suit. I had most likely been the target of predatory lending. I had known from the start that my income could make me a target. I’d heard the words of the broker. But because of my race? It hadn’t crossed my mind. I was devastated......How much room is there in anyone’s life for a mistake or the perception of a mistake if you’re young and black in America? How much of the American dream hangs in the balance? For the dozens of people I talked to, the reality is that if we want our dreams to come true, all too often we have to be almost perfect, making the right decisions all the time. Not getting that ticket. Not listening to that mortgage broker. Not speaking up.....I know the history of this country, know the history of redlining, know how my grandparents were locked out of neighborhoods because of their skin color. But for some reason I was still surprised. I would say I was mad, but more than that, I was hurt that I had been lulled into some kind of false bourgeois comfort that had made me think that my life was different from my predecessors’ lives. Sure, I had made it up that Hill, but at what cost?
African-Americans  downward_mobility  economic_downturn  millennials  the_American_dream  subprime  predatory_practices  racial_disparities  redlining  home_ownership 
january 2019 by jerryking
How Goldman Sachs Made More Than $1 Billion With Your Credit Score - WSJ
By LIZ HOFFMAN and ANNAMARIA ANDRIOTIS
April 9, 2017

Goldman bought TransUnion , TRU -0.21% the smallest of the three main credit-reporting firms, in 2012. By the time it went public three years later, TransUnion had become a data-mining machine, gathering billions of seemingly insignificant tidbits about ordinary Americans that it analyzed and sold to lenders, insurers and others.....As Goldman and Advent dug into TransUnion’s business, they found the fastest-growing revenue was coming from the company’s dealings with online lending startups, people familiar with the investment said.

These companies, such as LendingClub Corp. and Prosper Marketplace Inc., were using information from credit bureaus to find and vet potential borrowers. They were increasingly hungry for data that could pinpoint borrowers who traditional lenders might overlook or overcharge.....TransUnion’s new owners doubled down on these clients. They recruited Jim Peck, a big-data enthusiast who had run LexisNexis Risk Solutions, as CEO. He spent his first day in the company’s data center.

TransUnion began appearing at fintech conferences. It rebranded itself with a techy, purposeful vibe, wrapping its initials, a lowercase “tu,” in an @ sign. “We’re not just a credit bureau; we’re a force for good,” chirped a 2015 video.

The company spent heavily on technology and acquisitions. It replaced its old mainframe, a relic from the 1970s, with nimbler systems that allow it to splice information in new ways. It built a new data center and started scooping up small companies with niche data sets.....One acquisition tracks public records to help with fraud enforcement related to online shopping, among other things. Another uses utility payments, cellphone billing records and other data points to identify creditworthy borrowers who lenders might have overlooked, either because they have little or no debt history or potential red flags on their traditional credit reports. ​ ​​ ​​....By the time of its IPO in 2015, TransUnion had 30 million gigabytes of data, growing at 25% a year and ranging from voter registration in India to drivers’ accident records in the U.S. The company’s IPO documents boasted that it had anticipated the arrival of online lenders and “created solutions that catered to these emerging providers.”

Goldman itself is a customer. In 2016, the Wall Street firm launched Marcus to make online personal loans of a few thousand dollars. Its main pitch to borrowers: refinance expensive credit-card debt at lower rates.

Goldman buys the names and credit information of potential borrowers from TransUnion and sends direct-mail and other advertising to them.
Goldman_Sachs  TransUnion  Advent  private_equity  credit_reporting  credit_scoring  Equifax  Experian  data  data_driven  Marcus  subprime  solution-finders 
april 2017 by jerryking
Forty Acres and a Gap in Wealth
by HENRY LOUIS GATES Jr.
Published: November 18, 2007

The telltale fact is that the biggest gap in black prosperity isn’t in income, but in wealth. According to a study by the economist Edward N. Wolff, the median net worth of non-Hispanic black households in 2004 was only $11,800 — less than 10 percent that of non-Hispanic white households, $118,300. Perhaps a bold and innovative approach to the problem of black poverty — one floated during the Civil War but never fully put into practice — would be to look at ways to turn tenants into homeowners. Sadly, in the wake of the subprime mortgage debacle, an enormous number of houses are being repossessed. But for the black poor, real progress may come only once they have an ownership stake in American society.

People who own property feel a sense of ownership in their future and their society. They study, save, work, strive and vote. And people trapped in a culture of tenancy do not.

The sad truth is that the civil rights movement cannot be reborn until we identify the causes of black suffering, some of them self-inflicted. Why can’t black leaders organize rallies around responsible sexuality, birth within marriage, parents reading to their children and students staying in school and doing homework?
Henry_Louis_Gates  African-Americans  owners  land  property_ownership  achievement_gaps  racial_disparities  personal_finance  wealth_creation  real_estate  social_classes  subprime  home_ownership  generational_wealth  ownership 
november 2011 by jerryking
Goldman Goes Hunting In Battered Loan Sector After a Record Quarter - WSJ.com
MARCH 14, 2007 | WSJ | By KATE KELLY.

Goldman Goes Hunting In Battered Loan Sector After a Record Quarter
...Seeing growing turmoil in the market for risky home loans as an opportunity, Goldman Sachs Group Inc. is looking at pushing deeper into the business, ramping up its own subprime-lending operation and pondering the purchase of another.

On the heels of reporting record and expectation-smashing fiscal first-quarter profits that kicked off Wall Street's earning season, Goldman Chief Financial Officer David Viniar indicated that the brokerage is perusing the subprime sector for fire-sale prices.

Goldman's plans come amid a meltdown in the subprime-mortgage market, which caters to higher-risk borrowers with sketchy credit records and lower incomes.
Goldman_Sachs  subprime 
october 2011 by jerryking
Foreclosure Rise Brings Business To One Investor - WSJ.com
MARCH 14, 2007 | WSJ | By JAMES R. HAGERTY
BARGAIN BASEMENT
Foreclosure Rise Brings Business To One Investor
Mr. Barnes Buys Dregs From Worried Lenders; A Dozen for $35,250
foreclosures  housing  investors  subprime  mortgages  home_ownership  low-income 
october 2011 by jerryking
Hispanic Families, Isolated and Broke - NYTimes.com
By DOUGLAS S. MASSEY
August 4, 2011

ACCORDING to a new study by the Pew Research Center, Hispanic families
saw the largest decline in wealth of any racial or ethnic group in the
country during the latter half of the last decade: from 2005 to 2009,
their median wealth fell by an astounding 66 %. The reason? The
implosion of the housing market, where Hispanic families had invested
much of their wealth....Yet subprime lending affected both blacks and
Hispanics and, if anything, predatory lenders went after the former more
than the latter. So why did Hispanics suffer more?

The answer is simple: over time more and more Hispanics had become
economically vulnerable and eminently exploitable, a fact attributable
in large part to American immigration policy.
Hispanic_Americans  immigration  policy  subprime  decline  generational_wealth 
august 2011 by jerryking

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