Fallout continues from subprime mortgage ripoffs
The Kansas City Star
The Justice Department did the right thing in getting Wells Fargo & Co. to agree to pay up to $175 million to settle allegations that it steered blacks and Hispanics into more expensive subprime mortages before the housing bust.
The Los Angeles Times reports that the “systemic discrimination” took place from 2004 through 2009 in Wells Fargo’s wholesale lending, which provided mortgages through independent brokers. The violations occurred in 36 states and the District of Columbia.
The ripoff of minorities seeking a piece of the American Dream comes as no surprise to African Americans and Latinos. The settlement will include $125 million being paid to borrowers who were victimized.
Wells Fargo will provide an additional $50 million in downpayment assistance to people in areas where the discrimination had a significant effect. To keep the systematic problem from recurring, Wells Fargo has agreed to monitoring and an internal review of its direct-to-consumer retail lending practices.
Thank goodness for the Obama Justice Department. Would it have happened under the Bush administration? I don’t think so.