Sunday, January 6, 2013

Feds Drag Feet In Assuring That Terms Of BofA/Countrywide Fair Lending Lawsuit Settlement Is Carried Out; Compensation Slow In Reaching Victims

The Wall Street Journal reports:

  • A big legal settlement usually marks the end of the bulk of the work for the Justice Department. But a year after a $335 million deal with Bank of America Corp. to compensate minority borrowers for alleged discrimination, much remains to be done.

    The department's settlement administrator just began notifying affected borrowers in November, about five months later than originally planned. Then, weeks after letters went out to more than 233,000 presumed victims, about 10% of those letters have been returned as undeliverable, according to Justice Department officials.

    U.S. officials had warned that it might take two years for eligible borrowers to receive money from the settlement, but they also expressed hope that checks could be mailed out sooner. Those hopes have dimmed.

    "There were a number of production and other delays in getting the letters out to borrowers. However, we believe that we should be able to meet our original two-year time frame," Justice Department spokeswoman Dena Iverson said.

    The settlement covers lending during the height of the housing bubble from 2004 to 2008 by Countrywide Financial, the big mortgage lender acquired by Bank of America in 2008.

    Announced in December 2011, the agreement was the department's largest fair-lending settlement in history. The department said Countrywide charged black and Hispanic borrowers higher mortgage-lending fees or steered them into costly subprime loans even though their credit histories qualified them for a mortgage with more favorable terms.
For more, see BofA Settlement Hits Snags (Justice Department Behind Schedule in Resolving Lending-Discrimination Case).

No comments: