Justice Slammed Over Countrywide Pact
Senators fault the Justice Department for its acceptance of a $355 million settlement between the agency and Bank of America over alleged mortgage lending bias by the bank’s Countrywide Financial Corporation subsidiary. The lawmakers on the Judiciary Committee argue that payments going to some borrowers aren’t enough to remedy damages.
The settlement focuses on race, alleging that some black and Hispanic borrowers between 2004 and 2008 were charged higher interest rates and fees because of their race, not because of their credit history or ability to pay the premiums. The pact also alleges that minority borrowers with strong credit were targeted and steered into subprime loans when similarly qualified white borrowers were awarded prime loans.
Lawmakers took out their ire on Thomas Perez, assistant attorney general of the DOJ’s civil rights division. Perez acknowledges the shortcomings in the settlement, explaining it was not a “home run,” but he defends the move saying the DOJ has set up a task force to investigate and pursue illegal financial activity as a result.
That explanation doesn’t sit will with Sen. Charles Grassley (R-IA), the panel’s ranking Republican. “The department’s message is crime does pay,” Grassley says. “Light settlements and no prosecutions not only do not deter. They invite crimes of this sort to occur against similar future victims,”
Grassley addresses the estimated average settlement of $1,700 per victim among the more than 200,000 blacks and Hispanics involved in the settlement.
Perez responds that banks complain the DOJ is too hard on them, explaining that the goal of the Countrywide pact, which he says could grant some victims “tens of thousands” of dollars, was to maximize the amount that goes directly to victims
When asked by Grassley why the settlement doesn’t include removal of executives who knew of illegal practices at the banks, Perez answers, “That’s an idea worth considering.”
As part of the settlement, borrowers who were victims of higher fees will receive at least $700 but no more than $2,000, while borrowers who were steered into expensive subprime loans will receive considerably more depending on a case-by-case analysis of what they would have saved in a lower interest rate loan.
Login to read the full story or Subscribe now!
Other Recent Story
If current administration transition planning survives the rigors of partisan politics, HUD programs face deep cuts, more state involvement, and a dramatic reduction of HUD functions. All proposals to change HUD are embodied in a 152-page report crafted by the conservative
A former HUD executive in the Bush administration has been tapped to be HUD Secretary-Designate Ben Carson’s principal deputy to serve temporarily as designer of the new department leadership lineup. William Russell previously served as HUD deputy assistant
A long anticipated ruling from the New Jersey Supreme Court confirms fears of the state’s cities and towns that they must spend millions of dollars to build thousands of extra homes for the poor.
In what has emerged over the past four years as “Donovan’s Folly,” HUD must repay hundreds of public housing authorities tens of millions of dollars in atonement for raiding their operating funds in 2012 to help the Obama administration finance other projects.
HUD awards approximately $15 million to select owners of HUD-assisted senior housing developments to help their low-income senior tenants age in their own homes, thus delaying or avoiding the need for more expensive nursing home care.
The Federal Reserve Board increase in the benchmark interest rate last month is having little effect on mortgage interest rates, which were expected to continuing rising on anticipation of three more hikes in the basic rate. Instead rates are on freefall for the third consecutive week,
Bills introduced in the House and Senate take aim at HUD’s new Affirmatively Furthering Fair Housing rule. The rule, a rewrite of the1968 Fair Housing Act, was unveiled in 2015 and its peripheral regulations were made final at the end of 2016. The legislation -- HR 482, introduced
Despite the loss of a key housing program, the administration of Mayor Bill de Blasio (D) says that it built or preserved 21,963 units of housing in 2016 for poor and working-class New Yorkers, the most since 1989. The total includes 6,844 apartments in newly constructed
Sen. Elizabeth Warren (D-MA) is girding for battle with the Trump administration over the looming loss of her brainchild -- or at least major portions of it -- particularly the Consumer Financial Protection Bureau. Many in the housing sector consider the CFPB to be a major
With the housing market slowly trying to recover after a post slump kick start, builders descend on Orlando, FL for their annual confab and idea percolator upbeat but cautionary.