Today's Department of Justice fair lending settlement with Countrywide Financial is welcome news in a housing market still reeling from the costs of rampant predatory lending. Countrywide was the largest of the rogue mortgage lenders that caused the current crisis. Regulators' lax lending rules and loose oversight allowed these bad practices to flourish.
The DOJ settlement deals exclusively with Countrywide lending prior to the time it was acquired by Bank of America. The acquisition has been good for borrowers and the country because it took a bad actor off the street. But it has been a costly hardship for the bank itself.
Kickbacks for steering people into higher priced mortgages than they qualified for should never have been allowed. It hurt all families, especially in African American and Hispanic communities. If basic rules of fairness had been enforced when the subprime Wild West was gaining traction in 2000, we would have prevented a world of misery. Even so, the DOJ's action to address pricing discrimination and the steering of borrowers into bad loan products will benefit everyone in the home lending marketplace.
For more details on Countrywide's record of predatory lending, see our "Unfair and Unsafe" report (2008) at http://bit.ly/rXMzoA.
For more information: Kathleen Day at (202) 349-1871 or kathleen.day@responsiblelending.org; Ginna Green at (510) 379-5513 or ginna.green@responsiblelending.org.