Jack & Jill Politics

It’s about time. There’s big news coming out of Attorney General Eric Holder’s Justice Department.

Here’s the skinny from their press release:

The Department of Justice today filed its largest residential fair lending settlement in history to resolve allegations that Countrywide Financial Corporation and its subsidiaries engaged in a widespread pattern or practice of discrimination against qualified African-American and Hispanic borrowers in their mortgage lending from 2004 through 2008.

The settlement provides $335 million in compensation for victims of Countrywide’s discrimination during a period when Countrywide originated millions of residential mortgage loans as one of the nation’s largest single-family mortgage lenders.

The settlement, which is subject to court approval, was filed today in the U.S. District Court for the Central District of California in conjunction with the department’s complaint which alleges that Countrywide discriminated by charging more than 200,000 African-American and Hispanic borrowers higher fees and interest rates than non-Hispanic white borrowers in both its retail and wholesale lending. The complaint alleges that these borrowers were charged higher fees and interest rates because of their race or national origin, and not because of the borrowers’ creditworthiness or other objective criteria related to borrower risk.

Countrywide is owned by Bank of America now, making it the largest home lender in the country. $335 million sounds like a lot of money. But what price do you put on losing your home and lifesavings unjustly to foreclosure? What price do you put on dignity? Or — ok — what price do you put on the collapse of the global economy that these unfair lending practices helped to generate???

Ugh. I think this is a good start, but I, for one, want to see how this settlement translates into real relief for homeowners. AND I’d like to see other offending banks and lenders such as Wells Fargo also face pressure from the Justice Dept. From CNNMoney:

Thomas Perez, assistant attorney general for Justice’s civil rights division, said most of the victims of the discrimination were not aware that they were improperly steered to the riskier mortgages.

“They were thrilled to have gotten the loan and to have realized the American dream,” Perez said. “They had no idea they could have and should have gotten a better deal. This is discrimination with a smile.”

He said the discriminatory practices went to the heart of the problem with subprime mortgages and the financial market meltdown they helped set in motion. These borrowers paid on average tens of thousands of dollars more in interest and were subject to pre-payment penalties.

He said while the discriminatory loans happened across the country, about 30% of the victims were in California, where Countrywide was based. About two-thirds of the victims were Latino.

Not only is housing discrimination immoral. It’s also criminal and economically de-stabilizing. Dramatic measures must be taken so that banks understand that Americans won’t stand for this kind of treatment. Period. I hope this is the start of more announcements from the DOJ of this kind and I’d also like to see the executives who green-lighted this grotesque violation of American citizens’ civil rights in handcuffs facing a jury of their lesser-paid peers… Let’s see how far the Obama administration is willing to go to protect the American people and the American economy. This is an encouraging step.