Predatory sub-prime lending preyed on America’s poor and racialized communities

Evidence

Feasting on the forms of precariousness and social dislocation it had itself helped to create (and which had fed its growth), the financial market sank its fangs into a mortgage market where, thanks to deregulation, so-called “NINJAs” (urban poor with No Income, No Job, or Assets) were offered loans to purchase or renovate houses. … These loans, whose conditions were rarely disclosed by the unscrupulous salesmen (who worked on commission), offered low interest rates initially, or until debtors missed a payment, when they would skyrocket. … Sub-prime borrowers found themselves owing double, sometimes triple the value of their homes, taking out yet more sub-prime loans to cover their mounting debts (McNally 2011, 102–108; Wyly 2012). — Max Haiven, Cultures of Financialization, 154

Categorization

• XREF: The self-reinforcing predatory loop — finance causing the precariousness it then exploits — connects to the broader ‘finance colonizes its own conditions’ theme that is deWaard’s argument’s precursor. — connects to: Sub-prime lending exploited the American Dream myth to sell mobility to marginalized borrowers — Max Haiven, Cultures of Financialization, 528; Blaming borrowers’ financial ignorance obscures the structural logic of sub-prime lending — Max Haiven, Cultures of Financialization, 528; Progressive advocates helped push sub-prime credit into racialized poor communities. — Max Haiven, Cultures of Financialization, 201 (+11 more)
• DEEPTHINKING: The idea that the system ‘feasts on the precariousness it helped create’ is a dense feedback-loop insight — finance as a self-reproducing predator — worth sitting with.

Broader Connections

• Denied fair mortgages, black inclusion came on predatory high-risk terms #corroborates (0.93) — Dorothy A. Brown, Getting to Reparations, 441
• Sub-prime lending exploited the American Dream myth to sell mobility to marginalized borrowers #expands (0.92) — Max Haiven, Cultures of Financialization, 528
• Predatory lenders converted unaffordable homes into deceptively affordable mortgages #expands (0.90)
• Blaming borrowers’ financial ignorance obscures the structural logic of sub-prime lending #expands (0.88) — Max Haiven, Cultures of Financialization, 528
• Progressive advocates helped push sub-prime credit into racialized poor communities. #contradicts (0.85) — Max Haiven, Cultures of Financialization, 201
• Blaming individual borrowers hides a systemic precariousness produced by finance #expands (0.85) — Max Haiven, Cultures of Financialization, 208
• Higher-income Black families received subprime mortgages more than low-income white families #expands (0.80) — Dorothy A. Brown, The Whiteness of Wealth, 223
• Financialization creates a bifurcated hierarchy between celebrated risk-takers and racialized at-risk victims #expands (0.79) — Max Haiven, Cultures of Financialization, 45
• Finance colonizes global South elites and American urban poor via intermediaries #expands (0.78) — Max Haiven, Cultures of Financialization, 153
• The ideal entrepreneurial-agent construct erases the very concept of predatory lending #expands (0.77) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 347
• Predatory lending has thrived on hope as much as on poverty for centuries #expands (0.75) — Max Haiven, Cultures of Financialization, 195
• Financiers and sub-prime borrowers are twin symptoms of the same precarious economy #expands (0.72) — Max Haiven, Cultures of Financialization, 207