There is no Justice. Countrywide financial settled a civil action by the Department of Justice for $335 million. This equates to $1,675 dollars in compensation for each of the 200,000 listed victims. Meanwhile Hispanics and Blacks were pushed into sub-prime loans which drove the housing bubble, prices, through the roof. Many lost their homes in foreclosure due to bubble payments and high interest rates, when a regular mortgage payment might have been financially feasible.
Below are some of the details from the Department of Justice press release. While they pat themselves on the back for the largest settlement in history there have been no criminal prosecutions for the financial crisis and millions have lost their homes.
In today’s settlement with Countrywide Financial Corporation, we resolved the government’s allegations that Countrywide and its subsidiaries – which are now owned by Bank of America – engaged in discriminatory mortgage lending practices against more than 200,000 qualified African-American and Hispanic borrowers from 2004 through 2008. The settlement provides $335 million in compensation to victims of Countrywide’s discrimination during a period when Countrywide served as one of the nation’s largest single-family mortgage lenders and originated more than 4 million residential mortgage loans.
In this thorough investigation, the Department uncovered a pattern or practice of discrimination involving victims in more than 180 geographic markets across 41 states and the District of Columbia. These discriminatory acts allegedly included widespread violations of the Fair Housing Act and the Equal Credit Opportunity Act, and resulted in African-American and Hispanic borrowers being charged higher rates for mortgage loans – solely because of their race or national origin.
These allegations represent alarming conduct – by one of the largest mortgage lenders in this country, during the height of the housing market boom. For example, in 2007, a qualified African American customer in Los Angeles borrowing $200,000 paid an average of roughly $1200 more in fees than a similarly qualified white borrower.
This settlement will compensate the more than 200,000 African-American and Hispanic borrowers who were victims of discriminatory conduct, including more than 10,000 African-American or Hispanic borrowers who – despite the fact that they qualified for prime loans – were steered into subprime loans.
The settlement gets worse. It's not the Justice Department or the government who will oversee administering the $335 million victim compensation fund, it's a settlement administrator, but chosen by Bank of America, who bought Countrywide in 2008. The biggest problem is the mortgages, profits and executive bonuses. That money is kept for the most part. Also, a settlement implies no one has to publicly admit wrongdoing. Additionally, Countrywide does not exist anymore so it's unclear of Bank of America has to stop discriminatory practices. There also is no mention of giving subprime mortgages to people not in the country legally, which is still a policy of BoA, clearly a major financial problem in the first place. Bottom line, $335 million is just another slap on the wrist, pay to play fine, in comparison to the profits banks and their executives made while regular people went broke and were foreclosed on.