Bank of America Settlement Drips with Irony

The Obama Justice Department has announced a record settlement with Bank of America which will provide $335 Million in compensation to thousands of borrowers of African and Hispanic ethnicity.  According to accusations by the DOJ, these applicants suffered discriminatory loan practices by Countrywide Financial from 2004-2008.  Bank of America purchased Countrywide in 2008.

If the lender did engage in the alleged behavior, it should be fined.  But the irony of the situation is so thick as to demand commentary.  Why so?  Because the current crisis that is destroying our economic vitality was in great part caused by federal regulations requiring mortgages for persons unable to pay for them.  Is this a justified settlement, or another example of excessive zeal on the part of government?  We may never know for sure.

What we do know, however, is that the irresponsible behavior of the federal “watchdogs” has cost millions of Americans of every ethic background piles of money and years of security that can never be adequately accounted for.  While accepting their generous salaries and benefits, and while allowing the executives of Fannie Mae and Freddie Mac to receive millions in salary and bonuses, members of Congress like Barney Frank (D-MA) ignored the warning bells that could have brought about governmental reform before crashing our economy.  

All the while, members of Congress were getting sweetheart loan deals from Countrywide Financial.

Ever vigilant in the cause of equal justice (except when certain paramilitary radicals are standing in front of polling places with batons), Attorney General Eric Holder stated that financial institutions “should make judgments based on applicants’ creditworthiness, not on the color of their skin.”  Agreed, but that standard cuts both ways–in finance and in regard to the freedom to vote unimcumbered by threat.

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3 thoughts on “Bank of America Settlement Drips with Irony

  1. John,

    I see no irony here as you are mixing two topics that are very, very different.

    You correctly noted that the mortgage meltdown of 2008 was caused, through Fannie Mae and Freddie Mac, by elected officials like Bill Clinton, Barney Frank and Christoper Dodd. Specifically, they strong-armed banks into offering mortgages to people who did not qualify and could not afford to make the payments! This practice caused a bubble in the housing market by generating “phantom” demand that caused prices to soar. Then, when folks began walking away from the very mortgages designed to help them, the bubble burst with devastating results.

    Much like all liberal policies and ideas, this was “feel good” program designed to “help” folks, but instead caused devastation to the housing market and the economy as a whole! Liberalism is a mental disorder!

    The settlement with Countrywide is a very, very different issue.

    Every news account that I heard stated that Countrywide steered Black and Hispanic mortgage applicants to sub-prime mortgages (with higher interest rates), despite the fact that these folks’ credit scores were equal or better to white applicants who got prime mortgages (with lower interest rates). Blantant racial discrimination! If all the news accounts are true, these despicable acts not only call for heavy civil penalties, but are in violation of criminal law (Civil Rights Act of 1964). Therefore, those responsible should be held accountable with hefty prison sentences!

    Keep up the good work. I enjoy reading and responding to your commentary.

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