Protect Consumer Justice » Subprime lending

Federal officials looking into charges Wells Fargo discriminated against African-American borrowers

jg — Wed, 27 Jul 2011 23:05:07 +0000

Huffington Post: “The Department of Justice is preparing a lawsuit against Wells Fargo, the nation’s largest home mortgage lender, for allegedly preying upon African American borrowers during the housing bubble and steering them into high-cost subprime loans,” according to Shahien Nasiripour. The story, attributed to “three people with direct knowledge of the probe,” says the bank is negotiating with hopes of avoiding a public lawsuit. Last week Wells Fargo agreed to pay $85 million (without admitting wrongdoing) to settle charges by the Federal Reserve it had inappropriately steered African-American borrowers into subprime mortgage loans and falsified borrowers’ loan documents.

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Citigroup to pay $75 million for failing to disclose subprime mortgage holdings

jg — Thu, 29 Jul 2010 20:51:17 +0000

New York Times: “Citigroup has agreed to pay $75 million to settle federal claims that it failed to disclose vast holdings of subprime mortgage investments that crippled the bank during the financial crisis,” according to a report by Eric Dash and Louise Story. Two company executives have also been fined a total of $180,000. Dash and Story say the Securities and Exchange Commission essentially accused Citigroup of misleading its shareholders, as opposed to its customers.

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Countrywide reportedly agrees to $600 million class action settlement

jg — Mon, 26 Apr 2010 23:48:25 +0000

Los Angeles Daily Journal: Attorneys for Countrywide Financial have reportedly agreed to a $600 million settlement of a federal class action suit filed by investors, including pension funds, who claim the company withheld information about the possible impact of a downturn in the housing market. Gabe Friedman reports the suit claims “Countrywide — once the largest mortgage lender in the nation — furtively shifted its loan portfolio away from traditional fixed-rate mortgages toward riskier loans that required less documentation.” Friedman’s story is behind a pay wall, but Bloomberg BusinessWeek has an item about the story here.

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Wells Fargo agrees to reduce racial discrimination in lending

jg — Fri, 09 Apr 2010 21:48:15 +0000

National Law Journal: The NAACP has dropped a lawsuit against Wells Fargo after the bank agreed to take steps to address racial discrimination in its lending policies. Attorney Brian Kabateck, representing the NAACP, said, “This sends a message to the other banks that haven’t been willing to sit down with the NAACP and come up with solutions.”

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Mortgage scams net some jail time

scott — Tue, 23 Mar 2010 19:19:48 +0000

A little enforcement news. California and federal officials report this week that they’ve moved against several home mortgage and loan-assistance scams, shutting down two enterprises and sending four people to prison in another.

At the state level, the attorney general’s office announced it had closed two firms that allegedly charged consumers upfront fees for nonexistent loan-modification services. The closed firms are U.S. Foreclosure Relief and H.E. Servicing. Principals George Escalante and Cesar Lopez, and legal representative Adrian Pomery were also barred from working in real estate, and ordered to make $1 million in restitution through the sale of frozen assets, including jewelry and cars.

And the U.S. Attorney’s office in Los Angeles reported a fourth defendant in a mortgage scam, Terral Toole of Lake Elsinore, was sentenced Monday to more than seven years in prison after pleading guilty in a scam that netted $4 million in proceeds for homes that were not for sale.

Small consolation for those scammed, but still …

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Tentative ruling issued in NAACP suit alleging lending bias

jg — Tue, 02 Feb 2010 17:01:28 +0000

Daily Journal: A California federal judge intends to throw out a claim that a major national bank discriminated against blacks applying for mortgages during the recent housing boom. The NAACP sued First Tennessee Bank for allegedly targeting black homebuyers for subprime loans and expensive adjustable-rate mortgages. Judge Andrew Guilford‘s order for summary judgment for First Tennessee awaits finalization. In his tentative order, Guilford wrote that “while the NAACP pointed to reports saying the bank’s parent company had engaged in such lending, those weren’t enough to implicate First Tennessee,” according to the Journal’s Jason Armstrong. Armstrong said other banks facing similar suits by the NAACP are in settlement talks, according to court documents. Attorney Brian Kabateck of Kabateck Brown Kellner, representing the NAACP, told the Journal the issue is the banks’ general banking practices and the injunctions are intended to make banks change those practices going forward.

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Ameriquest settles predatory lending suits, but there’s not much money left

jg — Thu, 28 Jan 2010 22:54:56 +0000

Los Angeles Times: E. Scott Reckard reports the Ameriquest group of subprime lenders “has pledged $22 million to repay aggrieved borrowers and their lawyers — a fraction of its payments in previous suits before it shut down as the mortgage meltdown set in. The agreement potentially affects 712,000 borrowers from what once was the nation’s largest subprime lender.” Among borrowers’ complaints: hefty upfront charges, interest rates higher than promised, and loans with variable rates after fixed rates were promised. (The link to the settlement web site in the Times article is incorrect. This will take you to the site.)

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