Chicago - GHN - Editor - Subprime loans got lots of people in trouble financially, and many lost their homes, as the State of Illinois has zeroed in on one lender, Countrywide, accusing it of intentionally steering blacks and Latino borrowers into risky loans. "Countrywide effectively imposed a surcharge on mortgage loans based on race and ethnicity," Attorney General Lisa Madigan said.
Madigan said that Countrywide's actions cannot be explained by objective factors such as credit scores or debt-to-income ratios and has observed that steering black and Latino borrowers into subprime loans occurred decidedly more often than with white borrowers.
The Attorney General's officeinvestigated more than 83,000 Countrywide mortgages in Illinois during the period 2005 to 2007 and found black and Latino borrowers got higher-cost subprime loans three times greater than white borrowers.
"It's disturbingly clear that if you were an African-American or Latino borrower who walked into a Countrywide store, you likely paid more for your mortgage than a white borrower," Madigan said in a statement.
Madigan wants Countrywide and its corporate parent Bank of America enjoined from continuing its discriminatory policies, damages for the victims, and a $25,000 fine for each violation of the Illinois Human Rights Act.
Before Bank of America purchased it, Countrywide was the nation's and Illinois' largest lender during the housing boom.
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