NCLR Hails Settlement with Countrywide over Deceptive Lending Practices
December 21 2011
Washington, D.C.—Earlier today, the Department of Justice (DOJ) announced a settlement with Countrywide Financial Corp. over numerous violations of fair lending laws. NCLR (National Council of La Raza) applauds DOJ for holding Countrywide accountable for misleading thousands of homeowners and steering unsuspecting families to risky and expensive home loans.
“This historic settlement sends a powerful message that financial institutions will be held accountable for targeting communities of color with unfair practices that have led to needless foreclosures,” said Janis Bowdler, Director of the Wealth-Building Policy Project at NCLR. “The findings in DOJ’s investigation echo what we’ve been saying for years—deceptive lenders willfully preyed on Latinos and other minority borrowers, steering them to subprime mortgages even when they had good credit. Without a doubt, Countrywide and other predatory lenders share a great deal of the blame for the financial meltdown and the ensuing foreclosure crisis.”
According to the Center for Responsible Lending, borrowers of color were more than twice as likely to receive subprime loans as White borrowers, even after controlling for credit and other risk factors. Unsurprisingly, minority homeowners have been disproportionately affected by the foreclosure crisis. Approximately 17% of Hispanic homeowners have or are expected to lose their homes.
To its credit, Bank of America—which was not named in the investigation—immediately shut down Countrywide’s harmful practices when it acquired the company in 2008.
This is the largest fair lending settlement ever secured by the Justice Department. An estimated two-thirds of the victims in this investigation are Latinos.
“For the thousands of families that have lost their homes at the hands of predatory lenders, this settlement is a welcome and much-deserved Christmas present,” added Bowdler. “We hope this is the first of a series of enforcement actions by the Obama administration to hold predatory lenders accountable.”
Geography:California, Far West, Midwest, Northeast, Southeast, Texas