Countrywide Sued Again for Discriminatory Lending

By: Jimmy So
Topics: Banking ,; Real Estate

(Credit: AP)

Bank of America's mortgage unit Countrywide is being sued in Illinois for discriminating against black and Latino borrowers. According to a report in Bloomberg, Illinois's attorney general, Lisa Madigan, has filed a suit alleging that Countrywide disproportionately steered minorities into risky subprime mortgages:

"Countrywide's illegal discriminatory lending practices destroyed the wealth and dreams of thousands of African American and Latino homeowners," Madigan said in the statement. "Bank of America needs to be held accountable by taking financial responsibility for cleaning up the devastation of the predatory company that it chose to take over."

Remember that back in 2006, Eliot Spitzer, when he was still New York's attorney general, sued Countrywide for similar practices. The mortgage lender settled, compensated minority borrowers and adopted measures to prevent discriminatory pricing.

And less than a month ago, Bank of America paid $108 million to settle federal charges that Countrywide collected outsized fees from about 200,000 borrowers facing foreclosure.

And the lending unit is still mired in a massive $8-billion settlement for predatory loans in a suit filed by Madigan and involving 10 other states.

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by dadirt July 5, 2010 10:45 PM EDT: I guess they might get on the congressman an senators that got preferential loans from them as well!

If someone in the news media grows a pair and does some actual investigations, they might find out. Of course, there are Dems in the mix so it may be a hands off story, one of the many.; Reply to this comment


by cleantheDCcesspool July 5, 2010 9:49 PM EDT: I hope this goes to trial and C-span covers the defense arguments, which should raise issues of government forcing banks to lend to risky borrowers under the Community Reinvestment Act. The defense should also raise issues of obamao's buddies at ACORN threatening banks unless they made loans to people who basically could not finance a free lunch.; Reply to this comment


by pragmatist1 July 1, 2010 4:42 PM EDT: All IL is doing is grasping at straws and going after BofA, who didn't own Countrywide when these practices were going on, to try and take money out of their deep pockets. IL is blackmailing BofA with this suit trying to place them in a corner and force a settlement. IL is in desperate financial straits and I can hear the gasp of their last breath on this one. Minorities didn't have to go for the too good to be true mortgages, especially since many lacked any financial qualifications and creditworthiness. If IL wants to sue anyone, it should go after Fannie, Freddie, Dodd, Frank, Waters and Reid who promoted the everyone has a right to have a home and mortgage pc mentality. Home ownership isn't a right; it is a privilege and one that requires impeccable financial qualifications and creditworthiness.; Reply to this comment


by ianlou July 1, 2010 4:23 PM EDT: I can still see that ugly putz on Countrywide's TV commercials three years ago smirking in a self-satisfying way saying "No down payment, no closing costs, no mortgage fees, interest only loans, variable rate loans, don't be left behind, you too can afford the home you and your family deserve..."; Reply to this comment


by tsigili July 1, 2010 11:31 AM EDT: In this economy, no one should be getting mortgages, unless they are fixed rate, and prime mortgages.

"Creative financing" is what got so many people into trouble, in the first place.

If they can't afford a home, then they either have to consider moving to a more affordable place, or they must rent.; Reply to this comment


by infantryman1968 July 1, 2010 10:31 AM EDT: Countrywide Sued Again for Discriminatory Lending

LOL!

By design, sub primes are for people with bad credit because they are a high risk for default. Its a Federal Law that nobody can be discriminated for any reason on a home loan.

Catch 22?; Reply to this comment