Keywords: crisis, subprime mortgage, Bank of America, Lehman Bros., Blacks, Latinos, Barack Obama, John McCain, unemployment, housing crisis, Merrill Lynch

More than 85,000 people are facing unemployment as the subprime-mortgage crisis claimed its latest victims: investment bank Lehman Brothers Holdings, which filed for bankruptcy protection early Monday morning, and Merrill Lynch, No. 7 on The 2008 DiversityInc Top 50 Companies for Diversity^® list, which was bought by Bank of America, No. 3 on the DiversityInc Top 50.

Lehman Bros., whose stock price was an abysmal $0.26 per share at 10:00 a.m., down from $67.73 per share last November, filed for Chapter 11 bankruptcy protection in New York and plans to file a series of first-day motions, including requests to make wage and salary payments and continue other benefits to its employees.

Financial advisers from both Merrill Lynch and Bank of America (BofA) scrambled for the better part of the weekend to put together a deal that would reshape American finance. On Sunday, Merrill Lynch agreed to sell itself to BofA for roughly $50 billion. 

"My goodness. I've been in the business 35 years, and these are the most extraordinary events I've ever seen," Peter G. Peterson, cofounder of the private equity firm the Blackstone Group and former head of Lehman Bros., told The New York Times.

While the past year has been a series of highs and lows for most of Wall Street, BofA has had more highs than lows. The bank, which acquired troubled mortgage lender Countrywide earlier this year for $4 billion, is now the largest brokerage house and consumer-banking franchise.

American International Group, also threatening to board up its doors, this weekend sought a $40-billion lifeline from the Federal Reserve Bank. However, there's no indication whether the insurance giant will get the lifeline.

But this weekend's Wall Street shake-up wasn't unexpected and is the latest chapter in the subprime-mortgage crisis, which started last year and overwhelmingly targeted Blacks and Latinos. Broken down by race, 48 percent of subprime-mortgage borrowers in 2006 were Black, 42 percent were Latino and 17 percent were Asian while only 18 percent were white, according to The 2007 Annual Minority Lending Report, compiled by Compliance Technologies and Genworth Financial.

Just in time for the holidays, President Bush announced a plan to freeze an estimated 1.8 million loans for the next five years to help borrowers who may lose their homes because they were given credit they couldn't handle. Unfortunately, the plan did not help 600,000 borrowers who were already in foreclosure. As a result, both the NAACP and the National Council of La Raza (NCLR) have stepped in. The NAACP sued 12 mortgage-lending companies, while NCLR now hosts financial-literacy classes for Latinos.

"What makes offering this information different now than in the past is the state of the economy and the tide of foreclosures," Katherine Dillard, senior community-development specialist for NCLR, told The Houston Chronicle.

Russell Simmons and the Hip-Hop Summit Action Network held a press conference last week to address the issue. Click here to watch video coverage of the press conference.

But the effects of Sunday's major changes remain to be seen. Presidential candidates John McCain and Barack Obama released statements early Monday morning.

Sen. McCain: "The crisis in our financial markets has taken an enormous toll on our economy and the American people--first the decline of our housing markets followed by the collapse of Bear Stearns, Fannie Mae, Freddie Mac and now Lehman Brothers. I am glad to see that the Federal Reserve and the Treasury Department have said 'no' to using taxpayer money to bailout Lehman Brothers, a position I have spoken about throughout this campaign. We are carefully monitoring the financial markets, including the duress at Lehman Brothers that is the latest reminder of ineffective regulation and management. Efforts must also be focused on ensuring that the deposits of hardworking Americans are protected.

"It is essential for us to make sure that the U.S. remains the pre-eminent financial market of the world. This will be a highest priority of my administration. In order to do this, major reform must be made in Washington and on Wall Street. We cannot tolerate a system that handicaps our markets and our banks and places at risk the savings of hard-working Americans and investors. The McCain-Palin Administration will replace the outdated and ineffective patchwork quilt of regulatory oversight in Washington and bring transparency and accountability to Wall Street. We will rebuild confidence in our markets and restore our leadership in the financial world."

Obama: "The challenges facing our financial system today are more evidence that too many folks in Washington and on Wall Street weren't minding the store. Eight years of policies that have shredded consumer protections, loosened oversight and regulation, and encouraged outsized bonuses to CEOs while ignoring middle-class Americans have brought us to the most serious financial crisis since the Great Depression.

"I certainly don't fault Sen. McCain for these problems, but I do fault the economic philosophy he subscribes to. It's a philosophy we've had for the last eight years--one that says we should give more and more to those with the most and hope that prosperity trickles down to everyone else. It's a philosophy that says even common-sense regulations are unnecessary and unwise, and one that says we should just stick our heads in the sand and ignore economic problems until they spiral into crises. Well now, instead of prosperity trickling down, the pain has trickled up--from the struggles of hardworking Americans on Main Street to the largest firms of Wall Street.

"This country can't afford another four years of this failed philosophy. For years, I have consistently called for modernizing the rules of the road to suit a 21st century market--rules that would protect American investors and consumers. And I've called for policies that grow our economy and our middle-class together. That is the change I am calling for in this campaign, and that is the change I will bring as president."