The Glade 4.0

I figured that you were referring to that case, just not sure how you came to that interpretation. I'll give you that he was a lawyer on that case, though he was a junior member of an 8-lawyer team.

The problems I have with your statement are as follows:
The case was brought by individuals, not the government.
The case was brought, not because Citibank was "not creating mortgages for people below a certain credit level regardless of race." but because Citibank "rejected loan applications of minority applicants while approving loan applications filed by white applicants with similar financial characteristics and credit histories". In fact, Citibank was redlining, they did not reject loans based on race, but based on whether or not the loans were for minority neighborhoods, which is a sneaky way of rejecting applicants based on race.
Citibank wasn't forced to "lend to minorities below their previous credit floor", it was forced to lend to applicants in minority neighborhoods that met their previous credit criteria.

Did this force Citibank to make some high risk loans? Most likely, but Citibank was already engaged in high risk lending prior to this lawsuit.

You don't want none of this.

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The Dude abides.

I'll give you that Elmo overstated his position, however, why would you do the same thing in attempting to refute his overstatements?



What actually happened:
The case was brought, because the plaintiffs alleged Citibank "rejected loan applications of minority applicants while approving loan applications filed by white applicants with similar financial characteristics and credit histories". In fact The plaintiffs alleged, Citibank was redlining, they did not reject loans based on race, but based on whether or not the loans were for minority neighborhoods, which is a sneaky way of rejecting applicants based on race.
Citibank wasn't forced to "lend to minorities below their previous credit floor", it was forced to lend to applicants in minority neighborhoods that met their previous credit criteria Citibank settled, it offered to waive some fees for applicants who reapplied for loans, to review their loans with a group of other banks in the area, and if the applicants were not eligible for loans, they would be provided credit counseling. Citibank would set up a fund of no more than $360,000, and some plaintiffs would receive cash payments between $500 and $3,250. What the lawsuit did was create an environment where lenders would be forced to consider whether lending to people wot credit scores as low as 400 was more financially risky than not doing so and being sued.

Your statement of that the loans were rejected based on whether or not "the loans were for minority neighborhoods..." is laughable unless you believe that Cook, DuPage, Lake and McHenry counties are "minority neighborhoods", and that Citibank rejected all loans from those counties outright.

I believe that your statement of "it was forced to lend to applicants in minority neighborhoods that met their previous credit criteria." may be the most disingenuous, as members of this suit could receive benefits even if their credit scores were as low as 400; Citibank's "lending criteria" is stated as being:
(1) a Credit Score of 785 or higher; (2) a back-end ratio not exceeding 42 percent; and (3) a loan-to-value ratio not exceeding 95 percent.

The three representative plaintiffs received $20,000 each, and their lawyers received $950,000.



Source, please.

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"Dress cops up as soldiers, give them military equipment, train them in military tactics, tell them they’re fighting a ‘war,’ and the consequences are predictable." —Radley Balko

The big irony being that red-lining is a financially sound practice in the first place. It's always risky lending to underwrite and offer loans in areas where depreciation and market pressures diminish the probability of regaining the principal, much less term-value on the loan.

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HUD assistant secretary says agency won't raise FHA borrowing score



A credit score of 580? This is the criteria for 95-98% of all new home loans? This is a good thing?

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"Dress cops up as soldiers, give them military equipment, train them in military tactics, tell them they’re fighting a ‘war,’ and the consequences are predictable." —Radley Balko