On the surface, casting a wider net would seem to be profitable. However, there would not be the same return on investment. The key to the scam perhaps, is a community that is insular, embattled and trained to respect and trust clergy. You have those things in the black community. Add to that, the fact that it's mostly black women who go to churches.

Women are prime targets for financial scams.

The other day on Wolf Blitzer's show, he had on a former DA who was Sotomayor's former boss. In discussing the race issue, he mentioned that it was considered conventional wisdom not to choose black women for juries because they were thought to be “unsophisticated”. He went on to give an anecdote to suggest that that was not true. But it shows how blacks are seen, and how black women are seen.

Women are victimized, generally….black women are victimized many times more. The church is the prime mechanism for victimization. Church talk of woman being made for the man. Black women feeling that they are unloved because of the low marriage rates, and being reminded constantly that they are not complete without a man…don't do anything to bolster their esteem. What you have is a captive community of women, who feel bad about their condition, who are not encouraged to seek out credible information, who are told that prayer can solve all ills….
Every scam needs a hook…and I think this is the hook.

Religion reinforces helplessness.

“Financial Institutions like Wells Fargo are no fools when it comes to their bottom lines. They do only what WORKS.”

Well, as I mentioned before, casting a wider net and pushing these loans onto whites as enthusiastically as they pushed them onto blacks would have WORKED even better in terms of making them even more money, but they didn't do that.

Congregations – generally speaking – are not primed to be “independent” about anything. In religion, independence is discouraged. It is belonging to the group that is encouraged. Terrance posted about an occasion where gay men in the congregation found themselves responding to an anti-gay alter call! That is an example of arm-twisting to belong to the group. Pastors have automatic authority over their congregants lives…very dangerous. A trusted pastor, a fellow African American who makes it seem to a couple that buying a house is like buying milk, will cause that couple to ignore any natural misgivings they might have.

Think Bernie Madoff. It was other Jews who recommended his services to their friends and relatives…He's ok, he's “one of us”. I can absolutely imagine a congregant telling a trusted pastor their financial situation during personal counseling.

The pastors would push home ownership and perhaps “drop” the name of a particular institution that had approached him previously.

Your not hearing of something doesn't negate the reality.

“Wells Fargo, Ms. Jacobson said in an interview, saw the black community as fertile ground for subprime mortgages, as working-class blacks were hungry to be a part of the nation’s home-owning mania.”

This is the most telling quote in the article for me..

““Wells Fargo mortgage had an emerging-markets unit that specifically targeted black churches, because it figured church leaders had a lot of influence and could convince congregants to take out subprime loans.”

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That I find chilling.

We bought a house in about 2006 and at the time the market value was $883K based on the bank appraisal, my own research, and reviewing home prices in the area over the period of a few years and I used online tools to check home prices in the area and compared it to similar homes in other areas. When the market dropped drastically in 2007 – 2009 the estimated value of our home fluctuated up and down from base price $565K to $830K. Luckily we will be here for at least another 7 years until the kids graduate high school so we can wait it out.

I get the responsibility of the lenders and agree that they should be held accountable by the government. It is just that the dialogue around this issue was more around these “poor victims” who accepted a loan they knew was not in their best interest. That is what I wanted to address.

Congrats on your homeownership. :-)

The very troublesome part of this housing bubble was that lenders, appraisers, real agent agents and even homebuyers bought into the notion that the housing prices would always go up.

The previous owners before us bought the house for far more than what it should have been appraised for……the house “appreciated” over $100,000 in 2 years…that was NEVER realistic in my middle class neighborhood….yet the lenders loan officers or appraisers had no problem signing off on this…and from what I've found out the previous owners own a restaurant franchise, and yet made a horrible hising buy because unscrupulous lenders for whatever reason had no issue loaning out money on an inflated housing price.

This housing crisis will make you so angry when you know what was allowed to happen for so long.

Ya know, they said Bush had an “agreement” with at least 12 lenders to loan at least $1 trillion dollars before the end of the decade as part of his Homeownership challenge…..I can almost guarantee you most of those lenders are the sub-prime culprits.

This is similar to the issue I have with smokers knowing the risks of smoking and if they get lung cancer they turn around and try to sue the tobacco company.

Yes, consumers must always beware of schemes and scams. At the same time, the average consumer can only appreciate the risks of a transaction up to a certain point. It's at *that* point where banks, realtors, appraisers, etc. were MORE sophisticated in their knowledge of the risks involved. Yet they proceeded. So, in essence, the party who knew the risks better than most, gets the bailout. And the [Black and Brown] consumer returns back to the cycle of being broke, with bad credit.