Kenneth Lay died in 2006. Did you mean Kenneth Lewis?

Is it even legal to have a race field in a record like this?

FTA: "And these are the guys Kenneth Lay is so eager to wed Bank of America to?"

Kenneth Lay, the dead Enron guy? I doubt it.

@CMU_Bueller: Yeah, I didn't mind Lay, but Lewis bought my company, and I eventually got "phased out by outsourcing".

The race field is required on the government 1003 (loan application), and if people refused as guess was to be taken later. This is supposed to be done for government statistics.

mmm, where to start here? If a lot of people read the consumerist that are not white, there could be a flurry of lawsuits waiting to happen.

This article sounds a little dubious. Has it been fact checked? Or is it gossip just being repeated verbatim as per Consumerist policy?

Yeah, the government is not allowed to ask for race field, no matter what it's for, statistics or otherwise. At least the state government isnt allowed (here in alaska), other states it might be different, or even for the feds?

that dude needs just a little bit more tanning bed.

@Kevin Cotter: From Form 1003, Section "X":

You are not required to furnish this information, but are encouraged to do so. The law provides that a lender may not discriminate either on the basis of this information, or on whether you choose to furnish it.

Found the form here:[www.efanniemae.com]

@arch05: I need more cowbell.

This needs removed or this site is going to get the "tabloid" reputation. No large company would endanger themselves by having a spot to enter race. I can't wait for the next article about how Sears Auto Centers force blacks to buy whitewall tires.

@Petrarch1603: if you know the policy,t hen why are you asking?

Any proof at all for this other than one disgruntled ex employee? Christ, use some quality control Ben.

@Dibbler: You can have input, for statistical purposes and (believe it or not) protection from redlining. They have it for the same reason they ask for race during employment applications- to prove that they're not racist. Of course, with the right computer programming, I'm sure they can get that input to produce certain loan availability.

@Petrarch1603: Yeah, this doesn't pass the smell test. But maybe it's just because I believe that, if a company intended to follow racist lending practices, they would not be so blatant about it as to set up a system that disqualifies a loan applicant based solely on an input in the race field. Then again, stranger things...

need more evidence and clarification from this person:


1. how many apps did this person handle over his/her tenure?
2. how many were white? black? hispanic?
3. were all of the black apps sent to the sub prime dept?
4. were any of the white apps sent to the sub prime dept?

Maybe the fake and bake fried his brain

@Petrarch1603: Any email from a reader could be considered gossip- who is to say what is true and what is not? If Consumerist had to fact check everything, there would probably be nothing ever published. And how he heck to you fact check this- call Countrywide and ask them? One guess as to their answer. The best I think they can do is use their judgment to whether it is just totally ridiculous accusation or if their might be some true in it. If it is debunked, then they will usually put an update tot he article.

As mentioned before, it's not illegal to ask for race, it's just not required input. This correlates with this guy's statement that if he didn't input race, he was able to get better loans for his customers.

Unsubstantiated rumor posting is one thing - I don't think that's what this is. If it is untrue, however, it would be simple for Countrywide to prove so.

Wow, you folks posting comments giving Countrywide any benefit of the doubt is amazing. I assume you also read that certain zip codes are blacklisted now because of defaults, whether you have perfect credit or not. Yeah, Countrywide wouldn't discriminate.

It appears this has been an issue since last July:
"America's oldest black civil rights group sued a dozen mortgage lenders on Wednesday, claiming the companies discriminated against blacks by steering them into higher-interest, subprime loans while giving more favorable loan terms to white borrowers.

The lawsuit, which seeks class-action status, was filed in U.S. District Court in Los Angeles.

It demands a court order barring the lenders from discriminating against blacks and compelling them to comply with fair housing and credit laws.

Among the defendants named in the suit are Ameriquest Mortgage Co., Citigroup Inc., HSBC Finance Corp. and Washington Mutual Inc."
[www.iht.com]

Given the history of discrimination in the real estate business, this post is no surprise at all.

@Petrarch1603: Amen

You want to be treated like 'real' reporters, then you cobble together this kind of drivel and expect adulation. Grow up.

@weg1978: Last I checked this site was a blog not a real news site.

There's some meat here, too much, in fact. I believe Baltimore is going after lenders for basically the same thing. Then, after foreclosure, the lender refuses to maintain the property. This leads to its occupation by homeless, drug dealers, etc. bringing overall property values down and outright endangering neighbors. All-in-all, evil.

The suit in Baltimore involves Wells Fargo. But it is by-and-large the same set of circumstances. What an evil lot those that pursue profit and shareholder value can prove to be. How unfortunate so many are so connected to this pile of dung. It reminds me of the tobacco debacle, with retirement funds country-wide having vested interests in keeping big tobacco afloat. This time its evil bastards like this. From the Washington Post:

The city of Baltimore yesterday sued a major national lender for engaging in what it describes as abusive practices that have created a foreclosure crisis in black neighborhoods and eroded city coffers.

The suit, filed against Wells Fargo Bank in U.S. District Court, is thought to be the first of its kind brought by a major city against a national lender and could inspire similar litigation elsewhere, consumer groups and city officials said.

The city alleges that Wells Fargo violated fair-housing laws by targeting minority neighborhoods and placing borrowers there into loans they could not afford, a practice called "reverse redlining."

Bollocks. The Geek Squad story was a real news story, but this is just posting of inflammatory accusations of racism. If there is proof, link to it beyond just an anoymous email.

did you get laid off my countrywide?

I am sure a huge company based in calif would put thier focus on putting african american's into bad loans just so they can make sure that the KKK get some satisfaction.
Its not like they want to stay in business or anything.

@zouxou: "A majority of blacks in Boston who earned annual salaries from $92,000 (€66,894) to $152,000 (€110,521) also received subprime loans in 2005, according to a National Community Reinvestment Coalition study cited in the lawsuit." From your link

huh??

all that quote says is that that minorities making decent money made stupid decisions (to get an ARM mortgage). hell, if i would have wanted an ARM or requested one i'm sure the bank would have given me one. they make a ton of money off the ARM loans that don't default.

from the NCRC report: "If a consumer is a minority, particularly an
African-American or a Hispanic, the consumer is most at risk of receiving a
poorly underwritten high-cost loan."

what happened to the responsibility of the applicant? he/she/they made the choice, right?

There really are a couple of separate issues here: 1) did CW engage in racist (or otherwise unfair) practices; and 2) did it happen in the manner described by the former employee -- i.e., that the system denied loans based simply on the input of race information. What is described is different (mechanically) than identifying certain zip codes based on expected racial makeup. It is not better or worse, just far more brazen and, I believe, unlikely to have occurred in the manner described.

But the bottom line is if you don't understand what you are signing or how the loan works or if you have to eat beans to make the payment, then maybe, just maybe you should not be buying a house in the first place.

Causation != correlation. Could be the non-white folks were poorer on average, something like that.

D*mned if they do, d*mned if you don't. These racists posing as "civil rights groups" would be shouting from the rooftops if Countrywide DIDN'T offer loans to the types of people only eligle for the sub-prime types. If I were in charge there would be NO subprime loans, but especially no loans of ANY type to people of ANY race who happen to have dubious credit. They and the excessive press coverage that they generate are making it impossible for responsible homeowners to sell their homes.

eligiBle

This is patently absurd. I honestly can't believe that you would publish this garbage. Unsubstantiated, and anonymous accusations from a former employee (probably laid off), who has every reason to want bad press for his former employer.

If this was just a disgruntled former employee, let's see how anonymous she remains when the subpeona comes in....

I worked part-time at a mortgage company in college, helping process loan application packages so they could be sent to the underwriters for approval/rejection. Race was an optional field and it was clearly stated that you didn't have to provide it, but yes, if the applicant chose to leave it blank, then we entered the race based on our best guess. I believe it was for government statistical purposes but it's certainly the sort of data that can easily be misused during the underwriting phase.

I would be surprised if a company would be stupid enough to encode such discrimination into their computer system, but that doesn't mean it's not a possibility.

This is the Catch-22 of the blog world, I suppose - you have the freedom to run stories without being expected to fact-check them as thoroughly as a newspaper would, because blogs are expected to move info along very quickly. But without fact-checking, all the story really needs to do is seem plausible to *someone* in order to be published.

I'm not saying this story *has* to be false. It could certainly be true. But does it seem a little too facile, a little too late? Yeah, kinda.

So, grain of salt and all that, when reading blogs.

So basically these borrowers made poor loan choices (like most borrowers in the past few years, regardless of race) but now are trying to play the race card and claim CW "forced" them to make bad choices - WTF!? if you didn't like the terms of the loan, why did they sign it, why not go to another lender?

Oh, I forget, this is America - land without personal responsibility...

@Chris Walters: What was the guess based on? Did it lead to discussions around the water cooler of "So what color do you think this guy is?" ;-)

This guy is outright lying. The Countrywide Approval system (CAUS) IS automated, and there is no place within it for race. Additionally, while race is able to be noted in the 1003 it is not required.

Fees and points are determined by the individual loan officers (who also had some say in the rate). I do not doubt that there may have been some racial disparity in fees charged, since most sales people were white and people natural tend to favor people they relate too. That said, the more knowledgable customers were able to negotiate better deals and white customers were more likely to be second or third generation owners, and thus had a better reference base to negotiate.

Additionally, lenders with countrywide would not have made any money if a deal went over to Full Spectrum, so their incentive was always to keep the loan if possible, not hand it off.

This sounds like someone who was fired trying to smear a company.

The only way they were being predators here were to go after idiots that had horrible credit and live way above their means. Do I agree with these loans? No WAY...but this is no different than the payday loan places. There are PLENTY of these types of dolts and scumbags that think the world owes them a house, even though they can't get approved for legitimate loans...people of ALL races. This bling-bling world-owes-me-a-living craze has GOT to stop. Go get your free education (which is paid for by rampant reverse racism 'scholarships') then a decent job and THEN go buy a house. I am sick of the 'gangstas' and white trash set bringing this economy to its knees so they can pimp their cribs and have a big house to fit their 60" tvs so their Nascar friends have a place to worship Earnhardt

@LadyCarolineLamb: Well that was just as racist as any accusation in the article. Enjoy your banning

@Amiga: Redlining is one thing, but the author is stating that the BASIS of the loans is race. There is a big difference between giving a loan with worse terms because the applicant lives in the middle of the ghetto and has a terrible credit rating versus giving the loan because the person is of a certain race. Both can result in the same thing, but for entirely different reasons.

WRONG "Tracy Ham & Eggs" as usual, reading into it what you WANT to see

Bad credit racism: A bannable offense, lol

@Tracy Ham and Eggs: LadyLamb might not have been politically correct, but at least she made a point of saying its white trash and flippers as well. We do live in an entitlement society where a significant portion of the population (read: not people in our little co