The PJ Tatler

Holder on 'witch hunt' to force banks to relax mortgage standards

AG Holder needs to resign now before he sparks a repeat of the home mortgage meltdown. The man is a menace thanks to his rigid ideology:

In what could be a repeat of the easy-lending cycle that led to the housing crisis, the Justice Department has asked several banks to relax their mortgage underwriting standards and approve loans for minorities with poor credit as part of a new crackdown on alleged discrimination, according to court documents reviewed by IBD.

Prosecutions have already generated more than $20 million in loan set-asides and other subsidies from banks that have settled out of court rather than battle the federal government and risk being branded racist. An additional 60 banks are under investigation, a DOJ spokeswoman says. …

In several cases, the government has ordered bank defendants to post in all their branches and marketing materials a notice informing minority customers that they cannot be turned down for credit because they receive public aid, such as unemployment benefits, welfare payments or food stamps.

Among other remedies: favorable interest rates and down-payment assistance for minority borrowers with weak credit.

And when these loans go into default, as some of them inevitably will, taxpayers will get stuck with the tab and the housing market will take another hit. People who have responsibly paid off their loans get another double hit — taxes go up, home values go down.

DOJ evidently is aware that what they’re doing is dangerous and controversial: They’re forcing banks to stay mum about it.

As part of settlement deals, prosecutors have required banks to sign “nondisclosure agreements” barring them from talking about the methods used to allege discrimination. Bank lawyers contend the prosecutors are trying to hide the shaky legal grounds on which the cases are built. “It’s horrible what they’re doing at the civil rights division,” said Reginald Brown, a partner at Wilmer Hale in Washington, who has represented banks in connection to recent race-bias investigations. “They don’t have any proof, just theories.”

Read the whole story, which runs 3 pages. It just keeps getting worse. ACORN even makes a cameo.

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