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A classic case of institutionized racism

Published:

Bank of America pays largest settlement in history over discrimination lawsuit

Published - Dec 22 2011 12:38AM EST

Robert Tilford, Charlotte City Buzz Examiner

CHARLOTTE, N.C. -- Bank of America has agreed to pay $335 million to settle very serious allegations that its Countrywide unit engaged in a “widespread pattern of discrimination” against qualified Hispanic and Black borrowers on home mortgage loans.

The settlement with the U.S. Justice Department (DOJ) was filed Tuesday with the Central District court of California and is still pending court approval.

The DOJ says it’s the single largest settlement in history over residential fair lending practices. According to the DOJ's complaint, Countrywide over- charged 200,000 African-American and Hispanic borrowers by charging higher fees and interest rates than non-Hispanic white borrowers with a similar credit profile.

BUSTED BIG TIME!

The complaint says that these borrowers were charged higher fees and rates because of their race or national origin rather than any other objective criteria.

"These institutions should make judgments based on applicants' creditworthiness, not on the color of their skin," said Attorney General Eric Holder.

"With today's settlement, the federal government will ensure that the more than 200,000 African-American and Hispanic borrowers who were discriminated against by Countrywide will be entitled to compensation."

Charlotte, N.C.-based Bank of America Corp. bought the nation's largest subprime lender, Countrywide Financial Corp., in 2008 and used it to openly discriminate against certain borrowers. Dan Frahm, a Bank of America spokesman, said in a statement that the Bank of America “does not practice lending based on race.”

Yet the DOJ complain says otherwise?

Who are you going to believe?

Bank of America pays largest settlement in history over discrimination lawsuit

Published - Dec 22 2011 12:38AM EST

Robert Tilford, Charlotte City Buzz Examiner

“If B of A was telling the truth why did it settle then”, say Mark Gorge of Charlotte, N.C.

"We discontinued Countrywide products and practices that were not in keeping with our commitment and will continue to resolve and put behind us the remaining Countrywide issues," Frahm said.

The United States' complaint says that Countrywide “was aware” that the fees and interest rates that its loan officers were charging discriminated against African-American and Hispanic borrowers, but failed to impose meaningful limits or guidelines to stop it. By diverting certain borrowers into subprime loans from 2004 to 2007, the complaint alleges, Countrywide and B of A "harmed" those qualified African-American and Hispanic borrowers by forcing them to pay more.

Subprime loans generally carried costlier terms, i.e prepayment penalties and significantly higher adjustable interest rates that increased suddenly after two or three years, making the payments unaffordable and leaving the borrowers at a much higher risk of foreclosure.

B of A HURT AMERICA!

"Countrywide's actions contributed to the housing crisis, hurt entire communities, and denied families access to the American dream," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.

The settlement amount will be used to “compensate thousands of victims” of Countrywide's discriminatory mortgage loans from 2004 through 2007, when Countrywide originated millions of residential mortgage loans as the nation's largest single-family mortgage lenders. “B of A basically continued the practice of discrimination”, says Tom Adam of Charlotte, a civil rights advocate for African Americans.

“Thank God the Department of Justice investigated it and forced Bank of America to stop this type of lending discrimination. It sends a clear message to other financial institutions that they should not discriminate against people based on the color of their skin. This is a huge victory”, he said.

Lupe Lopez says “The discrimination against Hispanic and Latino Americans by B of A was systemic and ongoing. The DOJ investigation and lawsuit helped shine light on this practice and busted this racket. The settlement is proof of guilt, as far as I am concerned...we hope this sends a clear message to other banks that such behavior will not be tolerated.”

Robert Tilford

Entry #200

Comments

1.
TenajComment by Tenaj - December 21, 2011, 9:53 pm
I'm not a racist, but...... and it's not racism just because we disagree.
2.
time*treatComment by time*treat - December 21, 2011, 10:35 pm
What odds do you give that enough people will pool some of their settlement money into creating small community credit unions/banks so that others will not face the same problems?
3.
JAP69Comment by JAP69 - December 22, 2011, 6:23 am
If race was not allowed to be put on a mortgage loan or any type of loan this problem would not occur. Why is it necessary for race to be put on any loan application? For that matter why is race allowed to be put on an employment application?
4.
TenajComment by Tenaj - December 22, 2011, 10:47 am
It would be much much worst Jap69. Then it couldn't be tracked.

You can't make people do their homework when they deal in business transactions and you can't make banks have integrity.
5.
JAP69Comment by JAP69 - December 22, 2011, 11:12 am
Well it is rather difficult for me to understand as I was never raised to be racist against anyone. That is why I stated the whys. I just prefer to treat everyone equally.

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