New Orleans – In one of the many articles on yet another multi-$100 million settlement, one story, almost in an aside, stated that the purchase of Countrywide’s assets by Bank of America, was “one of the worst deals ever.” The price tag for Bank of America has been billions.
This settlement with the Justice Department for racial discrimination in lending by Countrywide wide was north of $300 million, proving mainly how much both of the bums still managed to get away with anyway. Countrywide steered qualified borrowers into subprime loans so that they would pay more in fees and interest. Attorney General Holder on NPR estimated that in 2007 a Latino borrower in Los Angeles would pay more $1200 more in fees and interest for such a loan in the first two years of the debt than they would have paid without discrimination. Attorney General Lisa Madigan in Illinois also announced a high ticket settlement as Bank of America tries to consolidate the charges against profits by the end of the year.
It goes without saying that Bank of America / Countrywide borrowers will not be so lucky and will continue paying the price long after this hand slap is forgotten. Many are still struggling with foreclosures. The date of the settlement will not include everyone victimized by subprime loans. Finding many of these borrowers who now have lost these same houses and no longer have the same addresses will also be frustrating and unsuccessful in many cases.
Reading all of this is bittersweet for me since in 2007 we were still trying to negotiate directly with the top dogs of Countrywide (literally as it turned out!) and get them to forsake such practices for a set of “best practices” and reforms on the subprime side. We finally finished the agreement at about this time of the year in 2007 and executed it in the spring of 2008. I left ACORN in June of 2008, and as near as I can determine Countrywide managed to slip the noose and evade most of the terms of the agreement as it transitioned to Bank of America and tried to “play pretend” that B of A had something more than a “pig in a poke.”
Eventually roosters come home to roost to stay with the animal metaphors, but when it comes to home mortgage scams and thievery, all of this still seems not nearly enough!