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Found this article saying that Bank of America's Countrywide unit will pay $335 million over loan-discrimination claims.
But looking through the article, I haven't found where ANYONE identifies what Countrywide did that was discriminatory. Can someone help me out here? This is part of the article. The rest can be read at the URL cited.
It says in a few places that they did racial discrimination, and then goes on about how terrible racial discrimination is for the country. But I don't see any examples, or even any attempts to provide any, or even say any actually exist. In one place it says Countrywide's officers were free "to differ a loan’s interest rates and other fees". And then it says this opens the door to discrimination. And that's the closest it comes to actually saying anybody did something wrong.
Well, offering loans at all, "opens the door" to discrimination, doesn't it? Running a restaurant "opens the door to racial discrimination". Any service that anybody provides to the public, of any nature, "opens the door to racial discrimination". Even if the person doing it isn't doing any racial discrimination to anyone, never has, and never will. Of course the door is open. It's called "freedom", and any freedom can be abused. But was the freedom to set rates for loans, abused on racial grounds here?
Where is the slightest evidence that ANYONE was steered to a sub-prime mortgage loan because he was black or Hispanic, instead of the fact that his income was lower than standard practices called for? Or his past repayment record too delinquent? Or his down payment was too low (or was zero)?
Where is a study saying something like, "Of all the people with such-and-such marginal qualifications, 80% of the marginal white applicants received non-sub-prime loans while 70% of the marginal black applicants, with identical qualifications, were told that they could only get sub-prime loans with worse terms"?
Maybe the evidence it there. If so, this article does an excellent job of hiding it. Wouldn't such evidence or studies be the FIRST thing the author made sure to bring out?
Written By Matt Egan
Published December 21, 2011
FOXBusiness
Bank of America’s (BAC: 5.23, +0.06, +1.16%) Countrywide Financial unit agreed on Wednesday to pay $335 million to settle allegations it discriminated against minority homebuyers by steering them toward dangerous subprime mortgages.
According to the Department of Justice, it marks the largest residential fair lending settlement in history.
(Full text of the article can be read at the above URL)
Last edited by CaseyB; 12-22-2011 at 12:47 PM..
Reason: copyright
"The complaint alleges that these borrowers were charged higher fees and interest rates because of their race or national origin, and not because of the borrowers’ creditworthiness or other objective criteria related to borrower risk."
Found this article saying that Bank of America's Countrywide unit will pay $335 million over loan-discrimination claims.
But looking through the article, I haven't found where ANYONE identifies what Countrywide did that was discriminatory. Can someone help me out here? This is part of the article. The rest can be read at the URL cited.
It says in a few places that they did racial discrimination, and then goes on about how terrible racial discrimination is for the country. But I don't see any examples, or even any attempts to provide any, or even say any actually exist. In one place it says Countrywide's officers were free "to differ a loan’s interest rates and other fees". And then it says this opens the door to discrimination. And that's the closest it comes to actually saying anybody did something wrong.
Well, offering loans at all, "opens the door" to discrimination, doesn't it? Running a restaurant "opens the door to racial discrimination". Any service that anybody provides to the public, of any nature, "opens the door to racial discrimination". Even if the person doing it isn't doing any racial discrimination to anyone, never has, and never will. Of course the door is open. It's called "freedom", and any freedom can be abused. But was the freedom to set rates for loans, abused on racial grounds here?
Where is the slightest evidence that ANYONE was steered to a sub-prime mortgage loan because he was black or Hispanic, instead of the fact that his income was lower than standard practices called for? Or his past repayment record too delinquent? Or his down payment was too low (or was zero)?
Where is a study saying something like, "Of all the people with such-and-such marginal qualifications, 80% of the marginal white applicants received non-sub-prime loans while 70% of the marginal black applicants, with identical qualifications, were told that they could only get sub-prime loans with worse terms"?
Maybe the evidence it there. If so, this article does an excellent job of hiding it. Wouldn't such evidence or studies be the FIRST thing the author made sure to bring out?
Written By Matt Egan
Published December 21, 2011
FOXBusiness
Bank of America’s (BAC: 5.23, +0.06, +1.16%) Countrywide Financial unit agreed on Wednesday to pay $335 million to settle allegations it discriminated against minority homebuyers by steering them toward dangerous subprime mortgages.
According to the Department of Justice, it marks the largest residential fair lending settlement in history. Covering actions between 2004 and 2008, the settlement offers financial compensation to more than 200,000 qualified borrowers who were charged higher fees or given subprime loans because of their race, not because of their creditworthiness, the government said.
"The department's action against Countrywide makes clear that we will not hesitate to hold financial institutions accountable, including one of the nation's largest, for lending discrimination," Attorney General Eric Holder said in a statement. "These institutions should make judgments based on applicants' creditworthiness, not on the color of their skin.â€
After tumbling below the $5 threshold earlier this week for the first time since March 2009, BofA’s shares were recently up 0.68% at $5.21.
BofA said it is committed to fair and equal treatment of all customers and it will continue resolving remaining Countrywide issues, Dow Jones Newswires reported.
The DOJ said Countrywide’s business practices permitted its loan officers and mortgage brokers to differ a loan’s interest rates and other fees, opening the door to unfair pricing discretion based on race. The government accuses Countrywide of being aware of this discrimination, but failing to impose meaningful limits or guidelines to stop it.
Subprime loans are considered more dangerous because they often include prepayment penalties and exploding adjustable interest rates. These mortgages are believed to have helped cause the mortgage crisis and ensuing recession.
“Countrywide’s actions contributed to the housing crisis, hurt entire communities, and denied families access to the American dream,†said Thomas Perez, assistant Attorney General for the DOJ’s civil rights division. “We are using every tool in our law enforcement arsenal, including some that were dormant for years, to go after institutions of all sizes that discriminated against families solely because of their race or national origin.â€
(Full text of the article can be read at the above URL)
Maybe black people (and women) could grow a pair and learn to negotiate.
My current business is automotive repair and I'll definitely hammer you on the price of service if all you know how to say is "yes".
The truth is I'm in a very weak bargaining position and surrounded by competition who will be happy to supply the same or better service for less money.
When I stand on my price, it's a bluff which I am in no position to back up.
Women rarely ch allege me on price and blacks are just as reluctant to walk on me.
On the other hand, Indians and Jews typically get work done for half the price of other people because they negotiate effectively.
They call me on my bluff and reap the rewards.
Tough crap if you don't have the nads to bargain with a banker.
I refused the first offer I was made on my first mortgage and they lowered the interest rate.
So has the racial angle to the U.S financial meltdown been under reported? This would be an example of how racism through deliberate racist lending practices has hurt the whole country.
Of course its "racism" and its no surprise that this "settlement" was reached during election season. Afterall, it's an election year for a half-black President, so everything will be tilted towards race. It's the only life raft available on the Sinking Titanic known as the Failed Obama Presidency.
And I agree with the OP, i'd like to see some examples. "Alleges" is not an example. It's an allegation.
Maybe black people (and women) could grow a pair and learn to negotiate.
We can see the need for people knowing how to negotiate but you still can't overlook that Black-Americans and Latinos were delibertly steered into subprime loans which led to the financial meltdown. Most of the blame needs to be put on Countrywide for this predatory lending.
The bottom of the news release explains that the above complaint is available on the website, but that would have required taking 5 minutes to read the entire release.
i have yet to see a good explanation of how one gets "steered" into a mortgage. if someone told me I could afford a $700,000 house I'd ask "okay, what's the monthly payment on that?" and come to a conclusion that either I can afford it or can't.
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