Things have changed quite a bit since then, as the spotlight has shifted to lenders and their behavior during the boom. States and cities continue to aggressively pursue subprime lending discrimination suits, and judges across the country are signaling a willingness to move forward with some cases. As the lawsuits wind their way through the court system, more details and allegations about the inner workings of the subprime world are emerging. And as startling as some of the charges already have been — a former loan officer for Wells Fargo testified in one affidavit that employees regularly referred to minority borrowers as “mud people” and called subprime mortgages “ghetto loans,” — there’s even more ahead, said David Berenbaum, executive vice president of the National Community Reinvestment Coalition.

“The ’smoking guns’ are coming out,” Berenbaum said, referring to possible evidence that lenders targeted minority communities and borrowers for higher priced loans. “And I expect more and more of these smoking guns to become apparent.”

In the latest development, a Superior Court Judge in Los Angeles recently certified a 2005 lending discrimination lawsuit against Wells Fargo as a class action case. The suit contends that area managers at the bank refused access in some minority neighborhoods to a software program that allowed for discounted prices on mortgage loans. Barry Cappello, a partner with Cappello & Noel in Santa Barbara, which represents some 10,000 to 20,000 borrowers in the suit, said he believes it is the first subprime lending discrimination suit in California to be classified as a class action.

According to Cappello, Wells Fargo introduced a program in 2002 called “Loan Economics,” which gave loan officers the authority to offer discounts to loan applicants. The savings on lower fees and interest rates could be significant, ranging from $500 to as much as $10,000 per loan. The suit claims that the Los Angeles area Wells Fargo manager refused to allow loan officers operating in certain minority neighborhoods to offer the program. Borrowers in predominantly white neighborhoods were given access to the software.

Cappello said the suit stemmed from complaints by black and Hispanic loan officers for Wells Fargo, who said they asked to use the software in their branches but upper management refused.

Wells Fargo is fighting the suit and has denied all the charges. In a statement, the bank said, “We are disappointed in this ruling and intend to vigorously defend this matter as the case proceeds. The decision does not indicate the court believes the underlying allegations have any merit. We feel the allegations represent a complete mischaracterization of our long-standing commitment to responsible lending and the pricing practices and tools we use. The policies, systems and controls we have in place ensure race is not a factor in the pricing or products we offer.”

The case could go to trial in about a year, Cappello said.

More lawsuits are expected in the near future over the treatment of Hispanic borrowers in Arizona and Texas, who were offered high-cost loans they didn’t understand at misleadingly low teaser rates, then refinanced into even more expensive loans than their initial mortgages, Cappello said.

Wells Fargo, the nation’s largest home lender, also has been a target of lawsuits elsewhere. Last month, Illinois Attorney General Lisa Madigan sued the lender, alleging that blacks and Hispanics were sold high-cost subprime loans more frequently than white borrowers with similar incomes. The suit contended loan officers were offered incentives by the bank to steer borrowers into the more expensive loans, and that white borrowers generally received the lower-cost prime mortgages.

Some borrowers thought they were getting prime loans from Wells Fargo Home Mortgage, the suit also charged. But their loans actually came from Wells Fargo Financial, the bank’s subprime unit.

In Iowa, two watchdog groups charged this week that minority homeowners in Des Moines were three times more likely to receive high cost subprime loans from Wells Fargo than white homeowners.

In June, the New York Times reported on affidavits from a 2008 lawsuit by the city of Baltimore against Wells Fargo over subprime lending, which charged that the bank targeted blacks in Baltimore and suburban Maryland for high-interest subprime loans. Former loan officers testified in affidavits about using terms like “mud people” and “ghetto loans.” The bank also had an emerging markets unit that pinpointed black churches as fertile ground for selling subprime loans, according to the former officers. And in March, the NAACP filed suits in federal court in California against Wells Fargo and HSBC, alleging minority borrowers were more likely to be issued higher rate subprime loans than white borrowers with similar credit scores and qualifications. Both banks have strongly denied the charges. The NAACP also has pending litigation against nearly a dozen other banks and lenders over subprime lending discrimination.

Should the charges in the lawsuits be proven, it would amount to massive violations of the Fair Housing Act, the Equal Credit Opportunity Act, and other fair housing and lending laws, Berenbaum noted. Enforcing fair lending laws has been “an issue the government has failed to address over the past decade,” he said. Lenders could face criminal penalties from the government for violating fair housing laws, and they could be subject to punitive damages and fines from government lawsuits.

Big lenders like Wells Fargo and HSBC are obvious targets for suits because of their size and the amount of lending they did. In addition, many other lenders and originators of subprime loans have gone out of business, complicating efforts to address allegations of lending discrimination through lawsuits.

That leaves a major question regarding all the lending still unanswered, Berenbaum said: Where has the U.S. government been? The Federal Reserve reported in 2005 that an analysis of federal mortgage data found that blacks and Hispanics were more likely to receive higher interest rates on mortgage loans – and that it intended to examine the practices of 200 lenders as a result.

But nothing’s happened since that announcement, Berenbaum noted. Instead, as the years go on, and the government takes no action, allegations about price differences in mortgage loans based on the race of borrowers and their neighborhoods continue to grow.

Mary Kane covers the economy for the Washington Independent, a Center for Independent Media site.

“Have any of you noticed that Barack Obama is part African-American?” Sebelius asked in response to a question about why the election is so close. “That may be a factor. All the code language, all that doesn’t show up in the polls. And that may be a factor for some people.”

The remark, delivered in the governor’s low key, folksy, out-from-behind-the-podium style, raised a couple chuckles but few eyebrows in the downtown Iowa City crowd, but Republicans took offense and responded in short order.

“Governor Sebelius’s remarks in Iowa City today are hurtful and divisive at best,” said Republican Party of Iowa Executive Director Caleb Hunter in a press release. “With less than 50 days to go, Democrats will continue to try and change the focus away from the issues that will decide this election.”

The rest of Sebelius’ remarks in Iowa City stuck closely to the Obama campaign’s talking points.

“The bottom line question is, do you think George Bush has been a wonderful president?” she told an audience whose questions focused as much on the horse race as on specific issues.

Sebelius takes questions at the Iowa City library.

One questioner argued that Obama was under-performing in polls because young voters with cell phones were under-reported, and Sebelius agreed. “I have a 24 year old and a 27 year old and they’ve never had a land-line since they went to college,” she said. “So they don’t show up in polls. But they need to show up at the polls.”

Yet at each turn, Sebelius tried to return the dialogue to bread and butter issues, to the delight of Bob Elliott, a former member of Iowa City’s city council and a leading local supporter of Sen. Joe Biden during the Iowa caucuses.

“Lipstick can stay home! Talk about the issues!” he shouted, in apparent reference to another governor.

During a brief press availability, Sebelius said she didn’t know much about her Alaska colleague. “She’s one of our new governors, and I’ve met her at a couple of events that all the governors were at,” she said of GOP vice presidential candidate and Alaska Gov. Sarah Palin.  “But we’ve really had no personal interaction. The real issue is John McCain vs. Barack Obama, and their policies could not be more different.”

Sebelius responded to criticism from Kansas Republicans about her campaign visits, and implied that the campaigning went hand in hand with her job.

“I can do a much better job as governor of Kansas, and Chet Culver can do a much better job in Iowa, if we have a partner in the White House instead of an adversary.”

For coverage of Sebelius’s visit to Cedar Rapids, click here.

The U.S. Department of Housing and Urban Development was conducting experiments to move inner-city poor to smaller communities, and Ames' Section 8 housing was being filled by poor black people from Chicago. There was a crime wave in Ames because black people from Chicago were  moving in to local subsidized housing. Local schools were struggling with discipline, and the halls had become unsafe.

For Ames Mayor Ann Campbell, the rumors became too much to handle.

"There was a lot of misinformation going around," she said. "And there was a lot of finger pointing going on. I felt like we needed to do something about it."

The city's government decided to put the issue front and center, no matter how difficult it would be, and called a community meeting to discuss race relations.

"I still remember sitting in my office with a group of people trying to figure out what to call the meeting," she said. "It was not an easy topic to address. Race is a very delicate issue."

But the meeting, titled "The Changing Cultural Climate of Ames," was held.  The city's leaders, including the chief of police and City Council, discussed the issues openly.

The forum attracted a capacity crowd in the council chambers and nearly filled the upper level of the city's auditorium. It focused primarily on a notion among many residents that an influx of Section 8 recipients from the Chicago area was causing crime rates to rise. Police have said in the past that many of the suspects, witnesses and complaining parties connected to a surge of major crimes in the city had Chicago backgrounds. However, the connection between these criminals and the Section 8 program appears to be more marginal than direct, officials said.

But as usual, the truth is a little more complicated.

According to police and news reports, criminal activity surged in Ames in mid-2007, and the people involved not only had a connection to Chicago, they had a connection to each other. Two murders within a month of each other, an armed car jacking and a number of other violent crimes swept the city, and in each case, the perpetrators or the witnesses were connected to Chicago. At the time, police said it was not those living in Ames' Section 8 housing committing the crimes, but rather people connected to those individuals who came to Ames to visit or stay.

Woods said the crime rate is cyclical and has very little to do with an increase in people with "brown skin" moving to town.

"The visual people were seeing when they were walking downtown was a lot browner than what they were accustomed to," said Barbara Woods, who co-chaired the Inclusive Community Task Force that was impaneled by the Ames City Council after the forum. "And at the same time, people thought the town was becoming more violent. It was all about perceptions."

The demographic changes experienced in Ames are occurring in towns across the country. Campbell said at a recent meeting of the Iowa Metropolitan Coalition, an organization that represents the state's largest cities, that she was asked about Ames' experience by a number of municipal leaders from communities that are experiencing similar issues.

Woods, a black woman who has lived in Ames for 30 years, said the difference is that Ames has always prided itself on being a very inclusive community. But the tolerance was partially because the city is home to Iowa State University.

"The people coming into our city were part of the university, so they were only here for a short time," she said. "Then, people start moving to Ames that have dark skin, and their kids are going to public schools and they are living away from campus. We can be very inclusive when we know the people are going to leave, but these were people who were obviously here for the long term, and I think that changed things."

Ames, according to census figures, is 87.3 percent white. And it's floating in the middle of an ocean of white people in Iowa, where 93.9 percent of residents are not people of color. The largest group of non-whites in Ames are Asians, which make up 7.7 percent of the population. 

Until recently, diversity meant graduate students living in essentially the same socioeconomic strata as the average citizen of Ames, Woods said. And for many of the new residents of Ames, the welcome wagon was not rolled out.

"People were suspicious," Woods said. "They spread false rumors. It was not a very welcoming atmosphere."

Campbell said most of the new residents were here because they had family in the area and because they wanted a better life away from big cities. There were a number of people, and not just blacks but also other minorities, who came to Ames because of Section 8 housing, she said, but there was not one single factor to why Ames was becoming more diverse.

"This was a different population and one that has had a history of poverty," she said. "So we decided to put our heads together and figure out how to make Ames a more welcoming place for everyone."

The Inclusive Community Task Force aimed to do something about that. Several meetings were held earlier this year, and in May it submitted a report to the Ames City Council on how to take the initial steps to make the city more welcoming to new residents.

The 34-page report is posted on the city's Web site, www.cityofames.org, and contains a list of "challenges" and "opportunities" facing the community in respect to changing cultural diversity.

The report outlines what nearly everyone in the community can do to make the community more inclusive. Suggestions run from holding informal "getting to know you" neighborhood gatherings to implementing employer training to establishing a "Welcome to Ames" packet of information. The report recommends the city of Ames gather and disseminate demographic data to present an accurate picture of the community, not one based on anecdote.

Since the initial forum and the task force meetings, Campbell said she has had a number of people who are new residents visit her and talk about the issues they are facing.

"I think just having the conversation helped," she said. "It put the issue on everyone's radar and opened up a dialogue that I think is very helpful."

Woods said it's still too soon to tell if the discussions were a success, but there are certainly conversations happening today that weren't happening in November.

"Long term, I hope it opened up some minds and makes people less tolerant of unacceptable behavior," she said. "If they hear someone spreading terrible rumors, I'd hope they would step up and say something."

So the race is coming down to the intangibles: electability, likability, competitiveness with the Republicans, and the identity politics of Voting For Someone Who Looks Like Me.  The most important issue for many voters may not be Iraq War or Health Care or Economy.  It may be Woman President.

After the Las Vegas debate, in an article titled “Hillary and the Winning XX Factor,” Celeste Fremon at Witness LA wrote:

Hillary plays the girl card because, every time she does, it has a very good chance of resonating with half the American population.

Fremon continues:

She spoke about mothers driving their daughters hundreds of miles to meet the person who might be the first woman president, followed by a heart-tugging story of a grandmother, born back when only men had the right to vote, who told Hil, “I want to live long enough to see a woman in the White House.” Yeah, it was cheesy, but it worked. I even got kind of teary, and I don’t much like the broad.

So, let’s not kid ourselves, if Hillary wins the Democratic nomination it will not be in spite of the fact that she’s a woman, it will be, in a weird way, because of it.

Last week, Maureen Dowd of the New York Times earned herself a permanent place in the Clinton enemy list:

Obama offered a zinger feathered with amused disdain: “My understanding was that she wasn’t Treasury secretary in the Clinton administration, so I don’t know exactly what experiences she’s claiming.”

Everybody laughed, including Obama.

It took him nine months, but he finally found the perfect pitch to make a trenchant point.

Obama’s one-liner evoked something that rubs some people the wrong way about Hillary. Getting ahead through connections is common in life. But Hillary cloaks her nepotism in feminism.

What if a male writer said “Hillary cloaks her nepotism in feminism” — or a male candidate?  Try to imagine all life as you know it stopping instantaneously and every molecule in your body exploding at the speed of light. Total protonic reversal.  That’s an important safety tip for Clinton’s male rivals.

Dowd cites Joan Di Cola, a Boston lawyer, in a letter to The Wall Street Journal this week:

“She hasn’t accomplished anything on her own since getting admitted to Yale Law.  She isn’t Dianne Feinstein, who spent years as mayor of San Francisco before becoming a senator, or Nancy Pelosi, who became Madam Speaker on the strength of her political abilities. All Hillary is, is Mrs. Clinton. She became a partner at the Rose Law Firm because of that, senator of New York because of that, and (heaven help us) she could become president because of that.”

In fairness, Clinton wouldn’t be the first candidate to benefit from a family tie, as the current president and his father could attest.  And Speaker Pelosi’s father served in Congress as well.  But if the “experience” so often cited by Clinton supporters as the reason for their support were really such a decisive factor, then why isn’t there a neck and neck race between Joe Biden and Chris Dodd for first place?  If “qualifications” matter, then Bill Richardson and his long resume would be close behind.

Clinton’s standard stump speech riff on the gender subject runs something like:  “I’m not running to be the first woman, I’m running because I feel I’m the most qualified, but it would be nice.”  But whenever the gender references happen, the cheers get just a little louder and just a little higher in pitch, and the same thing happened at the Nov. 10 Jefferson Jackson Dinner in Des Moines when Pelosi made reference to being the first woman Speaker of the House.

Clinton may be the first female front runner, but she’s hardly the first credible woman to run — Republicans Margaret Chase Smith and Elizabeth Dole come to mind, as does Democrat Shirley Chisholm.  And Barack Obama isn’t the first black candidate, either.  Has everyone forgotten Al Sharpton in the debates just four years ago, or all the primaries Jesse Jackson won in 1988?

Yet the buzz around Barack Obama seems to be less about Black President than about Generation X President.  At 46, Obama’s technically a Baby Boomer, under the traditional 1946-1964 definition.  But he’s part of what’s sometimes called the “Shadow Boomer” generation, born between 1958 and 1964.  (To me, born in December `63, you’re not a Boomer if you can’t remember the Kennedy assassination or the Beatles on Ed Sullivan.)  Obama often speaks of being too young to have participated in the civil rights battles of the 1960s, and his rhetoric has a certain 80’s generation style and humor.

In The Atlantic, Andrew Sullivan makes both the generational and racial case for Obama, arguing that only a post-Boomer can heal the bitter tone of post-1968 politics:

The divide is still — amazingly — between those who fought in Vietnam and those who didn’t, and between those who fought and dissented and those who fought but never dissented at all. By defining the contours of the Boomer generation, it lasted decades. And with time came a strange intensity.

The war today matters enormously. The war of the last generation? Not so much. If you are an American who yearns to finally get beyond the symbolic battles of the Boomer generation and face today’s actual problems, Obama may be your man.

Sullivan then explicitly makes the racial argument:

Consider this hypothetical. It’s November 2008. A young Pakistani Muslim is watching television and sees that this man — Barack Hussein Obama — is the new face of America. In one simple image, America’s soft power has been ratcheted up not a notch, but a logarithm. A brown-skinned man whose father was an African, who grew up in Indonesia and Hawaii, who attended a majority-Muslim school as a boy, is now the alleged enemy. If you wanted the crudest but most effective weapon against the demonization of America that fuels Islamist ideology, Obama’s face gets close. It proves them wrong about what America is in ways no words can.

Ironically, the leading candidate making the most explicit, leftist-populist case falls into a demographic that’s been largely lost to the Republican party: middle-aged white Southern male John Edwards.  But the identity politics are still in play here.  Implicit in the Edwards electability argument is the unspoken notion that a white Southern man will attract voters that a woman or a black man can’t.

Are these considerations fair?  Doesn’t matter; they’re real. Celeste Fremon concludes without concluding, weighing the policy issues against the intangibles.

All things being equal, that isn’t such a bad thing. As a country, we are more than ready for such a gender breakthrough. I just wish the person with the best shot at smashing that “highest, hardest glass ceiling” she mentioned in Las Vegas, was someone other than poll-driven, hawkish Hillary Clinton.

There’s a sense of depression at seeing a caged man, a member of the walking dead in so many ways, as well as a feeling of sheer joy with your own freedom that really hits as you leave the prison and drive south toward Mount Vernon.

Most of all, a glimpse behind the prison walls gives one an insight most people, and many Iowa legislators for that matter, don’t want. It forces you to realize that, like it or not, there are 1,291 human beings in there with stories.

To be sure, the central villians in the life stories of most of these men are the men themselves. But in these tales of crime and lost lives there are plenty of supporting cast members — from abusive parents to head-in-the-sand teachers to under-funded drug and alcohol treatment programs.

Only by forcing ourselves to listen to these stories — and really hear them — can we make them less frequent.

With original buildings dating back to the 1870s, the Anamosa prison is a Gothic structure, and aside from the even older Iowa State Penitentiary in Fort Madison, the most intimidating building in the state. Even if you’ve never seen a prison in your waking hours, it is likely that the image of Anamosa, with its haunting design, could appear in any nightmare related to prison.

The 1938 movie “Penitentiary” was filmed at Anamosa. It’s the only prison movie ever set in this seeming perfect location. Warden Jerry Burt told me that movie industry people involved with the remake of “The Longest Yard” in 2005 considered Anamosa as a location but opted for a closed facility in Long Beach, Calif.

One cellblock at Anamosa – LUC — houses 313 men in single cells, stacked six stories high. Guards use a relic device, a large wheel in a cage, to spin open prison doors. Unlike newer prisons, such as Fort Dodge, guards don’t have the best sightlines of all the inmates. There are blind spots for them in the cellblocks. A visitor with no corrections training can pick this up in minutes in the cellblock.

A few days ago, I toured the facility for the third time, the second with former Iowa Lt. Gov. Art Neu, R-Carroll, vice chairman of the State Board of Corrections and a long-time member of that panel. Neu chaired a corrections board meeting Friday morning before we toured the facility for about two hours.

*****

One of the issues discussed during the board meeting was the racial composition of the inmate population in Iowa’s prison system — which, according to today’s official count, has a total of 8,882 inmates, about 24 percent of them African-American.

Considering that the percentage of African-Americans in the state is 2.2 percent (according to 2005 figures from the U.S. Census) the prison population percentage is a striking figure.

“Our percentage (per capita) is among the highest in the nation,” says Board of Corrections member Johnnie Hammond, a former liberal state senator from Ames.

Iowa Department of Corrections Director John Baldwin noted that the state is in the top five for percentage of African-Americans based on the overall population.

Baldwin said Gov. Chet Culver has appointed a task force to delve into the “over-representation” of African-Americans in the prison system.

****

Having been to all nine of the state’s prisons in the last decade with Neu, I nevertheless learn something on each visit.

For example, prisoners don’t pay what you and I do for phone service.

They pay much more.

Some of that money flows back from the phone companies to the prison budget in the form of “rebates” — to the tune of about $1.2 million in fiscal year 2008.

“If you got our bill you would be surprised by it because it is much more expensive,” Baldwin said.

He noted that added phone costs to inmates include traces and recordings of calls as well as other measures.

“There’s a huge behind-the-scenes operation,” Baldwin said.

For her part, Hammond thinks the inmate phone costs should be lower.

“Most of them are poor — otherwise they would have had a better defense attorney,” Hammond said.

In fact, she thinks inmates should get one free call home each week.

“If you maintain strong families you are more successful when you go back home,” Hammond said.

****

At the Board of the Corrections meeting members discussed institutions other than Anamosa.

For example, there is a serious overcrowding problem at the women’s prison in Mitchellville. As of this morning, Mitchellville had an inmate count of 663 for a 443-prisoner capacity.

A few years ago, while touring that prison, I learned that some of the inmates were convicted prostitutes, and that our tax dollars were at work in this way.

Last week at Anamosa, a top prison official who used to work at Mitchellville told me there is a judge in Iowa who is keen on sentencing prostitutes to prison.

****

What’s the most common cause of a prison riot?

Bad food or no food.

A few years ago when Neu and I toured Anamosa, the kitchen there was a joke, with terrible floors and cracks and outdated equipment — and a loading dock where good food comes in and bad food goes out at the same time.

Neu made this into a top issue, pressing for a better kitchen at board meetings.

The construction process has started, and during our guarded walk through the prison grounds several prison employees stopped Neu and thanked him for the work on the kitchen issue.

****

One of the more depressing areas in the prison is a special treatment unit area.

“It’s really kind of a small nursing-home area,” Neu said.

Some of the prisoners in here clearly appear in deathbed status.

Why not just let them out to die?

First of all, there would be some complications with medical funding.

And then there are the inmates’ wishes.

“Ninety percent of the people I’ve talked to don’t want to go somewhere else to die,” said Jerry Connolly, nursing services director at Anamosa.

Apparently, that scene in the “Shawshank Redemption” in which the aged parolee can’t handle the outside is an informed plot point.

****

Neu’s brother, Charles, a Carroll native who went on to become chairman of the history department at Brown University, accompanied us on the tour.

Charles Neu asked to see the prison “library,” which amounted to little more than a closet of old paperbacks.

“There’s a good many things we’re proud of,” Warden Burt said. “The library is not one of them.”

Charles Neu said he believed there is much rehabilitative power in books.

“They could reflect on their lives and examine them,” Neu said. “It deepens their lives in so many ways.”

“That’s pathetic,” he ad
ded as we left the library.

It's a sad, scary thought that there are those out there who would cut down our leaders because of hatred or fear. But we know it's true; it's happened before. And while I agree with Lynda that "it would be a mistake" to think that the apparent threats against Obama are "placed on solely the color of his skin." I do think that his race plays the largest role in the issue.

In a "60 Minutes" interview with Barack and Michelle Obama last February, CBS' Steve Kroft said the following to Michelle Obama:

"This is a tough question to ask, but a number of years ago Colin Powell was thinking about running for president, and his wife Alma, really did not want him to run. She was worried about some crazy person, with a gun…. Is that something that you think about?"

"I don't lose sleep over it because the realities are that, you know, as a black man, you know, Barack can get shot going to the gas station, you know," Michelle Obama replied. "So, you know, you can't make decisions based on fear and the possibility of what might happen. We just weren't raised that way."

An astute response, I think, on matters of race in America. Whether or not Obama is the Democratic nominee, his candidacy has fostered a sort of introspection (at least by some) on race relations and what it means to be a black American today. Unless my memory fails me, no one talked about assasination attempts on Joe Lieberman because he was Jewish or John Kerry because he was Catholic. No one really seems to be concerned about the Hispanic Bill Richardson's safety (though to be fair, he's not in the race's first tier). Americans are still reconciling issues of black and white, and the legacy of slavery and segregation still looms large in our society, whether or not we admit it. In the end, I think Obama's blackness really is at the core of this safety issue—which tells us just how far we still have to go.