Tag Archives: civil rights

State of Washington Fines Countrywide for $1 Million for Discriminatory Lending — Will Seek to Revoke Countrywide’s License to Do Business in State

Washington Governor Christine Gregoire today announced plans by her state to fine Countrywide Home Loans $1 million for discriminatory lending.

In addition, the company will be required to pay more than $5 million in back assessments the company failed to pay.

Gregoire also announced the state is seeking to revoke Countrywide’s license to do business in Washington for its alleged illegal activity.

Joining Gregoire at today’s announcement was Deb Bortner, director of consumer services at the Washington state Department of Financial Institutions (DFI), and James Kelly, president of the Urban League of Metropolitan Seattle.

“The allegation that Countrywide preyed on minority borrowers is extremely troubling to me,” Gregoire said. “And I hope to learn eventually just how much this may have contributed to foreclosures in our state. The allegation offers evidence that Countrywide engaged in a pattern to target minority groups and engage in predatory practices.”

“That’s why we intend to bring the full weight of the state on Countrywide to rewrite home loans for minority borrowers who may have been misled into signing predatory mortgages,” the governor noted. “My job is to protect hard-working Washingtonians, and protect them we will.”

DFI is required to examine every home-lender licensed in the state of Washington. The agency conducted its fair lending examination of Countrywide last year. At that time, DFI looked at roughly 600 individual loan files and uncovered evidence that Countrywide engaged in discriminatory lending that targeted Washington’s minority communities. The agency also found significant underreporting of loans during its investigation.

“The Urban League is seeing far too many families caught up in the mortgage crisis who are being steered into bad loans,” stated James Kelly. “Today’s announcement from the governor is consistent with her message of protecting Washingtonians from national mortgage instability.”

DFI sent Countrywide a statement of charges on June 23, notifying the company of the fine and the back assessments the state plans to pursue.  Washington says that the investigation continues.

We have written on the disproportionate impact that the mortgage meltdown and housing crisis has had on minorities.

Washington’s action against Countrywide comes on the heels of lawsuits for fraud, deception, and unfair trade practices filed against Countrywide by the states of Illinois, California, and Florida.

 

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Can HUD Be Saved?

We had all but forgotten about the Department of Housing and Urban Development (HUD) when HUD secretary Alphonso Jackson resigned on Monday.

His resignation, far more than his tenure on the Cabinet, reminded us that HUD has a role to play in the current housing and mortgage crisis, particularly in regard to the regulation of Fannie Mae and Freddie Mac. 

We would like to see HUD take an active role in investigating whether discrimination played a role in the subprime mortgage crisis, which has hit the cities and minorities especially hard.

We would also like to see HUD participate in ramped-up efforts to expose and punish mortgage fraud, which has also disproportionately affected minorities.

But perhaps it is too late for HUD.

Created with great hope in 1965 as part of President Lyndon Johnson’s War on Poverty, HUD was given the powerful mission of developing and executing a national policy on housing and cities.  Since then, HUD has become a center of government corruption and waste, betraying the public trust in scandal after scandal under both Democratic and Republication administrations, as it awarded contracts and funneled enormous sums of public money on the basis of personal and political connections rather than the public interest.   

Alphonso Jackson’s resignation gives President Bush the opportunity to appoint a new HUD secretary who is capable of dealing with the devastating consequences of the housing crisis and the mortgage meltdown on the cities.

Whomever the president picks, the first job of any new HUD secretary will be to overcome and reverse HUD’s decades-long track record of incompetence and corruption.

That will be an extremely difficult task.