Wells Fargo Deliberately Pushed Dangerous Loans On Blacks, Hispanics: Lawsuit

Wells Fargo has been accused of targeting minorities with predatory high-cost home loans that pushed them into default and foreclosure.

Cook County, Illinois, which is home to the city of Chicago, filed a lawsuit in federal court on Friday against the nation's largest mortgage lender. The suit alleges that Wells Fargo contributed to the housing crisis, which the county claims has cost it millions of dollars in lost property tax and the cost of having to deal with abandoned buildings, among other issues. The lawsuit says damages could exceed $300 million.

Wells Fargo deliberately issued home loans with high interest rates and inflated or improper fees to black and Hispanic borrowers, many of whom would not have qualified for a traditional loan, the suit alleges. The lawsuit also charges that the bank did so even when it was clear the borrowers wouldn't be able to keep up with the costly payment plans.

Such practices are known as "equity stripping," the suit says, because they "stripped and continue to strip borrower home equity." As a result, the chances that minority borrowers would fall behind on payments or be forced to submit to foreclosures were increased, it said.

Between 2000 and August 2014, Wells Fargo allegedly made about 55,000 loans to minority homeowners in Cook County that are suspected of being predatory and discriminatory, according to a statement released by Cook County Board President Toni Preckwinkle and Cook County State Attorney Anita Alvarez.

Wells Fargo vehemently denies the allegations, calling them "baseless." "It's disappointing they chose to pursue a lawsuit against Wells Fargo rather than collaborate together to help borrowers and home owners in the County," company spokesman Tom Goyda told HuffPost in a prepared statement.

"Wells Fargo's team members live and work in the Chicago area and we stand behind our record as a fair and responsible lender," Goyda said, adding that the company has an $8.2 million down payment assistance grant program that "helped create 547 new homeowners" in Cook County over the past two years.

"We will vigorously defend ourselves and continue to focus on helping customers succeed financially and expanding homeownership in Illinois and across the United States," he added.

The suit alleges that Wells Fargo violated the Fair Housing Act, a federal law that prohibits race-based discrimination by mortgage lenders.

Cook County has walked this path before: Preckwinkle and Alvarez filed very similar suits earlier this year against HSBC and Bank Of America. Bank Of America spokesman Richard Simon said there "is no basis" for the claims the lawsuit makes. HSBC did not return a request for comment to HuffPost.

In the past, cities including Baltimore and Miami have also sued Wells Fargo and other banks on allegations of discriminatory home lending practices. A lawsuit brought by Baltimore against Wells Fargo charging that the bank steered minority homeowners into costly loan agreements and also charged minorities higher interest rates and fees than white borrowers with the same credit scores was ultimately settled in 2012 for $175 million.

More recently, though, a judge dismissed a suit from the city of Miami against the bank, saying there was no standing to sue under the Fair Housing Act and that the suit had been brought too late, according to Bloomberg News.

(Hat tip Consumerist)

http://www.huffingtonpost.com/2014/12/03/wells-fargo-loans-lawsuit_n_6261356.html
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Wells Fargo Deliberately Pushed Dangerous Loans On Blacks, Hispanics: Lawsuit

Wells Fargo has been accused of targeting minorities with predatory high-cost home loans that pushed them into default and foreclosure.

Cook County, Illinois, which is home to the city of Chicago, filed a lawsuit in federal court on Friday against the nation's largest mortgage lender. The suit alleges that Wells Fargo contributed to the housing crisis, which the county claims has cost it millions of dollars in lost property tax and the cost of having to deal with abandoned buildings, among other issues. The lawsuit says damages could exceed $300 million.

Wells Fargo deliberately issued home loans with high interest rates and inflated or improper fees to black and Hispanic borrowers, many of whom would not have qualified for a traditional loan, the suit alleges. The lawsuit also charges that the bank did so even when it was clear the borrowers wouldn't be able to keep up with the costly payment plans.

Such practices are known as "equity stripping," the suit says, because they "stripped and continue to strip borrower home equity." As a result, the chances that minority borrowers would fall behind on payments or be forced to submit to foreclosures were increased, it said.

Between 2000 and August 2014, Wells Fargo allegedly made about 55,000 loans to minority homeowners in Cook County that are suspected of being predatory and discriminatory, according to a statement released by Cook County Board President Toni Preckwinkle and Cook County State Attorney Anita Alvarez.

Wells Fargo vehemently denies the allegations, calling them "baseless." "It's disappointing they chose to pursue a lawsuit against Wells Fargo rather than collaborate together to help borrowers and home owners in the County," company spokesman Tom Goyda told HuffPost in a prepared statement.

"Wells Fargo's team members live and work in the Chicago area and we stand behind our record as a fair and responsible lender," Goyda said, adding that the company has an $8.2 million down payment assistance grant program that "helped create 547 new homeowners" in Cook County over the past two years.

"We will vigorously defend ourselves and continue to focus on helping customers succeed financially and expanding homeownership in Illinois and across the United States," he added.

The suit alleges that Wells Fargo violated the Fair Housing Act, a federal law that prohibits race-based discrimination by mortgage lenders.

Cook County has walked this path before: Preckwinkle and Alvarez filed very similar suits earlier this year against HSBC and Bank Of America. Bank Of America spokesman Richard Simon said there "is no basis" for the claims the lawsuit makes. HSBC did not return a request for comment to HuffPost.

In the past, cities including Baltimore and Miami have also sued Wells Fargo and other banks on allegations of discriminatory home lending practices. A lawsuit brought by Baltimore against Wells Fargo charging that the bank steered minority homeowners into costly loan agreements and also charged minorities higher interest rates and fees than white borrowers with the same credit scores was ultimately settled in 2012 for $175 million.

More recently, though, a judge dismissed a suit from the city of Miami against the bank, saying there was no standing to sue under the Fair Housing Act and that the suit had been brought too late, according to Bloomberg News.

(Hat tip Consumerist)

http://www.huffingtonpost.com/2014/12/03/wells-fargo-loans-lawsuit_n_6261356.html
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House Republicans Hand Warren Buffett Big Win On Expensive Loans To The Poor

WASHINGTON -- House Republicans approved a set of lucrative perks for Warren Buffett on Tuesday, passing legislation to help his mobile home empire secure government protections on high-interest loans to poor people.

Buffett, the world's third-richest man, is by far the biggest operator in the mobile home industry. His Clayton Homes company sells more mobile homes, also known as "manufactured housing," than any other company. The two largest mobile home lenders are both Buffett companies -- Vanderbilt Mortgage and 21st Mortgage and Finance.

The industry targets the poor. More than 84 percent of the industry's customers earn less than the median household income.

The Buffett enterprises have faced allegations of predatory lending and collection practices, most recently detailed this month in an investigation by the Seattle Times and the Center for Public Integrity. Nevertheless, Buffett's empire has had great success pressuring Congress to let it charge very high interest rates on mobile home loans while still qualifying for government protections from predatory lending lawsuits.

The GOP bill that passed on Tuesday would allow companies to charge very high interest rates on mobile home loans -- up to about 14 percent in the current market -- while still getting the benefit of the doubt in court for predatory lending cases. High-interest borrowers would lose key consumer protections, like mandatory housing counseling, and be exposed to a host of other predatory lending terms, including penalties that prevent homeowners from refinancing into less expensive loans. The bill also would allow mobile home salespeople to receive kickbacks for steering customers into high-cost loans.

The GOP bill was introduced by Rep. Stephen Fincher (R-Tenn.), who received $10,900 in campaign contributions from Clayton Homes employees in the 2014 election cycle, more than any other lawmaker. The second-highest recipient was House Financial Services Committee Chairman Jeb Hensarling (R-Texas), who shepherded the bill through committee and defended it on the House floor Tuesday, attacking the "far left" for allegedly trying to shut down mobile home lending.

"They want to protect consumers right out of their homes!" Hensarling said, echoing comments from Fincher. "They're hitting Main Street, and low- and moderate-income Americans are suffering."

Consumer groups, however, have lined up in opposition to the bill, including The National Manufactured Home Owners Association, the Center for Responsible Lending, and the Consumer Federation of America, as Rep. Jan Schakowsky (D-Ill.) noted on the House floor.

Clayton, Vanderbilt and 21st Mortgage employees combined to give $23,950 to Fincher in the 2014 election cycle, and $13,500 to Hensarling. They gave $11,000 to the National Republican Congressional Committee, and $13,000 to the Tennessee Republican Party. None of the firms contributed to the Democratic Party or its campaign arms. Employees of Berkshire Hathaway, the Buffett conglomerate that controls all three mobile home companies and dozens of other enterprises, typically favor Republicans. In the 2014 cycle, they gave over $2.1 million to GOP candidates and committees, roughly double what they spent on Democrats.

Buffett uses the Manufactured Housing Institute to lobby for his perks indirectly. Clayton general counsel Tom Hodges and 21st Mortgage president Timothy Williams both serve on the MFI board. Buffett's employees give thousands of dollars a year to the group.

Berkshire Hathaway did not respond to a request for comment. Clayton Homes pointed to a prior statement attackingthe Seattle Times/Center for Public Integrity predatory lending reporting as "provocative" and "misleading." The Center for Public Reporting's response to those claims is here.

President Barack Obama issued a veto threat against the mobile home deregulation bill on Monday, and Democrats largely voted against it. Rep. Terri Sewell (D-Ala.), who frequently supports Wall Street deregulation, was the only Democrat to defend the legislation on the House floor.

"Manufactured housing must remain an option," Sewell said, insisting, "In no way does this bill take away consumer protections. ... I see this not as a predatory lending bill, but as an access to affordable housing bill."

The bill does, of course, take away protections for consumers in the high-cost mobile home market. Mobile home lenders have argued that because they issue smaller loans than those for traditional houses, they need to charge higher interest rates to make a reasonable profit. But there is no evidence that mobile home lending faces an existential threat from the predatory lending rules developed under the 2010 Dodd-Frank law. Clayton Homes posted a $558 million profit in 2014, the first year that the new rules went into effect. That figure was up from $416 million in 2013, as its home sales climbed to 30,871 from 29,547.

The bill passed by a margin of 262 to 162. Only one Republican, Rep. Walter Jones (R-N.C.), a frequent opponent of favors for financial firms, voted against it.

A total of 22 Democrats supported the bill, including Reps. Brad Ashford (D-Neb.), Sanford Bishop (D-Ga.), John Carney (D-Del.), William Lacy Clay (D-Mo.), Jim Cooper (D-Tenn.), Jim Costa (D-Calif.), Henry Cuellar (D-Texas), Peter DeFazio (D-Ore.), John Delaney (D-Md.), Gwen Graham (D-Fla.), Ron Kind (D-Wis.), Ann Kirkpatrick (D-Ariz.), Greg Meeks (D-N.Y.), Seth Moulton (D-Mass.), Scott Peters (D-Calif.), Collin Peterson (D-Minn.), Jared Polis (D-Colo.), Kathleen Rice (D-N.Y.), David Scott (D-Ga.), Terri Sewell (D-Ala.), Brad Sherman (D-Calif.) and Kyrsten Sinema (D-Ariz.).

Republicans shot down an amendment proposed by Rep. Maxine Waters (D-Calif.) that would bar any lender that had "been found to have engaged in unfair, deceptive, predatory, or abusive lending practices, or convicted of mortgage fraud" from taking advantage of the bill.

http://www.huffingtonpost.com/2015/04/14/manufactured-housing-republicans_n_7065810.html
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Refinancing



Jared Bernstein


Boy, it's a whole different thing to talk about the housing market when it's looking up. President Obama went to Phoenix to talk housing yesterday, a locale no doubt motivated by the double-digit increases in home prices there in recent months. Of course, those gains are off an awfully low base as the state was slammed by the housing bust, but it is well established that the housing market is now reliably rising from the dead, which is pretty much where it was the last time he talked housing out there shortly after he was elected. However, there were a couple of interesting things that came out of the speech.

http://www.huffingtonpost.com/news/refinancing/
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C.A.R. Commends Rep. Costa for Introducing Bill to Help Homeowners Refinance

LOS ANGELES--()--The CALIFORNIA

ASSOCIATION OF REALTORS® (C.A.R.)
applauds California

Congressman Jim Costa (D-Fresno) for introducing legislation today that

will allow responsible homeowners to take advantage of current low

interest rates on mortgages.

"The Responsible Homeowner Refinancing Act" aims to remove barriers that

keep homeowners from refinancing through the Home Affordable Refinance

Program (HARP) and level the playing field to allow banks to compete for

borrowers' business.

"C.A.R. thanks Congressman Costa for introducing this important

legislation that will help millions of struggling homeowners refinance

into affordable mortgages," said C.A.R. President LeFrancis Arnold.

"Allowing responsible homeowners to refinance will ensure that HARP can

be used to its fullest potential and reach every homeowner it was

intended to reach. We hope the House will find time to address this

important piece of legislation prior to the end of the session," said

Arnold.

Specifically, the bill eliminates hurdles to refinancing for homeowners

who:

Cannot afford upfront fees or the cost of appraisals

Have too much or too little equity to qualify for HARP

Have a second mortgage and currently cannot refinance

Have mortgage insurance and currently cannot refinance

Costa's bill is the House companion to legislation introduced last May

by Sens. Barbara Boxer (D-CA) and Robert Menendez (D-NJ). "The

Responsible Homeowner Refinancing Act of 2012" would streamline and

align the refinance processes of Fannie Mae and Freddie Mac and make it

easier for homeowners who are current on their mortgage payments but who

have been previously unable to refinance to finally take advantage of

record low interest rates.

Leading the way...® in California real estate for more than 100 years,

the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org)

is one of the largest state trade organizations in the United States

with 155,000 members dedicated to the advancement of professionalism in

real estate. C.A.R. is headquartered in Los Angeles.

http://www.businesswire.com/news/home/20121010006477/en/C.A.R.-Commends-Rep.-Costa-Introducing-Bill-Homeowners
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