Insiders: Countrywide Made Racist Sub-Prime Loans

The Wells Fargo racist sub-prime mortgage lawsuit reminded me of an old post we did where an ex-Countrywide employee alleged that that loan company had racist practices too. Here’s the insider email we posted back in February, 08:

I confess. I did a bad thing. I worked for Countrywide Home Loans for about 2 years, shortly before the “mortgage meltdown.” Countrywide is guilty of all charges and then some!

I can tell of several of instances where a customer would be qualified for a loan because their credit score and other factors based on the written product description, however, when I went in to put their (this only happened to African-Americans) ñ they were not qualified for the loan product and had to be referred to Countrywide’s subprime mortgage company Full Spectrum. Full Spectrum offered higher rates and fees. I got wise day and started not imputing the race so the computer could give me “approval.”

Most of my troubles with Countrywide began when I was told I needed put customers in more exotic products such as the “No Income-No Ratio (NINA),” “Stated Income-Stated Assets (SISA),” any ARM product or the classic “Pay Option ARM” (where you have a choice of 4 payments).

Countrywide offered incentives for putting customers in those types of products. My customers needed stability on their loan and didn’t need to refinance every two to three years stripping them of their equity (provided they had any). I didn’t agree with their policies so my tenure was short-lived.

I tried several times to contact the confessor but they never responded to my requests for an interview so we could get more details. Perhaps Baltimore and the NAACP should also be looking into Countrywide’s lending practices.

In other news, if you’re a minority and you want your loan approved, don’t fill out your race on the app.

PREVIOUSLY: Countrywide Made Racist Sub-Prime Loans?


Edit Your Comment

  1. Jonbo298 says:

    That picture…just when I didn’t think it could get any more hideous, now the image of leatherface taking the next step of dark is just…I can not unsee.

    • Shoelace says:

      @Jonbo298: It can get more hideous. He was probably trying for a different shade, got a chemical reaction with his ‘orange’, then wham! This is so ugly he’ll have to try again, so stay tuned…

  2. korybing says:

    Why was there even an option for race on the computer form?

    • Cat_In_A_Hat says:

      @korybing: Probably for “statistical purposes” or some other bs excuse. Newsflash Countrywide and WellsFargo Blacks just like Whites in America with great credit and a good source of income can afford to buy homes and shouldn’t be automatically shoveled into this sub-prime loan nonsense. I, just like many of my fellow Americans have a dream of one day owining a home and would hate to be denied a standard fixed rate loan and forced to pay upwards of $100,000 over my lifetime because I checked a certain category in the race box. Hopefully the Obama administration will work to rememdy this situation and other discirminatory lending practices by banks and mortgage companies.

      • korybing says:

        @Cat_In_A_Hat: Ah, so it’s the same reason why there’s a “male/female” box on forms where your gender should have zero effect on whatever you’re applying for. Got it.

        • Cat_In_A_Hat says:

          @korybing: Yes because we all know us women folk spend way too much money each month on shoes and purses to pay our mortgage on time and are more likely to default.

          • korybing says:

            @Cat_In_A_Hat: God if I had a dime every time I spent our mortgage check on shoes I would have enough money to buy more shoes. I just can’t get enough of them, I say!

      • Megalomania says:

        @William Brinkman: You’re pathetic. It’s a picture illustrating a concept that everyone finds anathema that’s shown here because this is just as disgusting. Being outraged at its existence is just keeping wounds open. I suppose you also always use the phrase “African American”, because god knows you could never have a black guy from outside the USA. Grow up.

    • kemikos says:

      @korybing: Required. See “Home Mortgage Disclosure Act”.

    • Megalomania says:

      @korybing: So that we could have the statistics that allowed this issue to be noticed? I don’t like it, but since people can discriminate without having a computer tell them to it lets you pick up on the statistics. Now, why we need to know your race and gender for standardized tests where no one else but you can set your score, god knows.

      • RandomZero says:

        @Megalomania: There are other ways for statistics like this to be gathered for these purposes. Taking it off the app form, however, makes it a LOT harder for discriminatory practices to become institutional, as opposed to a rogue agent at the bottom levels (since head office doesn’t actually see the person). There’s a reason these questions are illegal in this context in Canada.

  3. William Brinkman says:

    The reproduction of blackface, intentional or not, definitely disturbs me no matter what the context.

    • dohtem says:
    • Mackinstyle says:

      @William Brinkman: It goes back to the Minstrel shows where whites would dress up as African Americans and act like goofs. I think the Photoshooper is trying to depict these racists as that, where ultimately the joke is on them being so foolish and naive.

    • Trai_Dep says:

      @William Brinkman: I look at it in a similar way when school kids read Huck Finn. (And they should). In context, it’s a warning, an acknowledgment, a lesson.

      • Skankingmike says:

        @Trai_Dep: try reading Huck Finn out loud in school.

        now there’s an uncomfortable feeling in a class room if ever there was.

        I agree btw.

    • Zanorfes says:

      @William Brinkman: Agreed. It’s not appropriate.

    • joe18521 says:

      @William Brinkman:

      Agreed. Please replace with a kitten photo.

    • Myownheroine says:

      @William Brinkman:

      I’m with you. It’s really bad.

    • acasto says:

      @William Brinkman: Overly sensitive much? How can something be intrinsically disturbing? Context is everything, thought all the politically correct types don’t like to acknowledge so. That would ruin all the fun.

      • William Brinkman says:

        @acasto: You post-modernist assholes make me want to puke. I can’t believe they hand you people degrees.

        • RandomZero says:

          @William Brinkman: Are you really trying to say that spotlighting any racist practice, ever, even in the context of “This is absolutely unacceptable and must be stopped” is bad? because that’s how it’s coming off. The entire intent is to show the loan practices as completely reprehensible, by linking them with well-known racist stereotyping. How is this any more offensive than the term “mud-people” in context in the Wells Fargo article?

          Amusing side note: I remember my father, an actor, telling me a story of a similar issue that happened a number of years ago in Toronto. A play was to be shown, consisting largely of black actors in blackface. The central theme of the play was that stereotyping and especially racism is bad and stupid and wrong. Various civil rights groups throughout the city launched massive protests, and the play was eventually cancelled. The response from the black actors’ community?

          “Err, this play was making your own point better than you did. By the way, you managed to take food off the tables of half the black actors in the city. Way to go. Assholes.”

        • acasto says:

          @William Brinkman: Such a wonderful point. Here this whole time I was confusing what I thought to be pragmatism with what was actually post-modernist assholeism. Thank you so much for clearing this up. Now, I am off to see the world in a whole new light. Things that I once would have taken contextually in jest, I shall now cast out as the oppressive bigotry it is. I will organize a party of those of us concerned so that we can gather up every copy of Tropic Thunder and burn it along with an effigy of Robert Downey Jr. for his portrayal of a white man playing a black man has obviously set racial itegration back approximately 33.27 years. Now, I am off to accost those of my co-workers who are not directly disgusted by the concept of satire in racial matters. Wish me luck.

          • OMG! Con Seannery! says:

            @acasto: You mean a “person of lighter skin pigmentation who happens to have a Y chromosome portraying a person of darker skin pigmentation who happens to have a Y chromosome.” Don’t want anyone getting offended!

      • EqualOpportunityCrasher says:

        @acasto: Even in context it is pretty bad. There is a history behind blackface that is offencive. Even if in jest, there’s no reason to that because of the collective memories tied to it. That’d be like going up to a middle aged Japanese person and going, hey, remember that time we nuked you? Yeah, that was funny.

        @NigerianScammer: I’m with him on this one, it is pretty offencive.

      • OMG! Con Seannery! says:

        @acasto: God forbid anyone have an opinion anymore…

        And yes, I did just say the word “God.” I guess the PC lynch mob should be on the way.

    • modelchick8806 says:

      @William Brinkman:

      Agreed. I find the picture terribly offensive. My goodness Consumerist who do you have working in your office?

    • SunnyLea says:

      @William Brinkman: Thanks. Logged in to say the same.

    • NigerianScammer says:

      @William Brinkman:
      Give it a rest. It’s not a big deal.

    • HiPwr says:

      @William Brinkman: I find pictures of cats offensive.

  4. sanjsrik says:

    Oh, poor fools, you imagine racism is something that needs a white pointy hood. It doesn’t. The most insidious racism is the guy standing in front of you smiling away all the while thinking you’re a sand n****r (which I’ve heard people refer to me, even though I’m not white, but I’m not black), thinking, “I’m going to so screw you over just because I can.”

    What is the big mystery here. I fail to see why ANYONE is shocked. Racism is as strong as it ever was, go to the midwest, go to the south, go to the New England states. It’s only on either coast that when someone is intentionally being racist will actually call you what they think of you to your face. At least have to respect their honesty.

    • korybing says:

      @sanjsrik: Just because racism is still present doesn’t mean it’s justified or right. It should still be fought. Racism is still here, yes, but if you went back in time a few decades in America it was much, much worse. It has a long way to go but it has come a long way and it’s still progressing. People should be surprised to see professional businesses acting like ignorant bumpkins stuck in the 60s.

      Saying that “racism happens” and that nobody should be shocked is like saying “homicide happens” and that nobody should be shocked. Just because it still happens doesn’t mean it’s okay.

      • sanjsrik says:


        No one said it was “okay”. But at least recognize that it is part of life. Oh, sure, decades ago it was overt and out there for everyone to gawk at. What, you really think it’s still not institutionalized? We can live in our ivory towers of shock and say “Oh, my gods, I can’t believe people still act that way.” What was the line from “Guess Who’s Coming to Dinner”, “Nothing will change until all of your generation are dead and buried in the ground.” Unfortunately, those who practiced it ARE dead and buried in the ground, but their children were brought up with it. So, it’s endemic in some circles. One of those circles being the OBN and business.

        • nakedscience says:

          @sanjsrik: WHY in the world do you keep bitching about people being outraged over blatant racism?! No one is SHOCKED, like you keep saying, but they are PISSED, and they have every reason to be pissed, and if we REMAIN pissed, we can continue to fight the racism. Are you suggesting we just shrug and ignore it?!

          You’re just typing so you can see yourself type. STOP IT.

    • pop top says:

      @sanjsrik: “At least have to respect their honesty.”

      No, I don’t. I don’t have to respect a bigot for any reason whatsoever.

      Even if there is racism, it’s not supposed to be institutionalized; that’s the shocking thing. The fact that such a disgusting practice was so widespread within the company and everyone went along with it quietly is the shocking part.

    • karmaghost says:

      @sanjsrik: Nazi Hitler. There, I invoked it. Now we can stop talking.

    • nakedscience says:

      @sanjsrik: ” At least have to respect their honesty. “

      And will people STOP SAYING THAT? No, I will NOT respect racism. Just because someone is honest about their bigotry and idiocy does not mean I have to fucking respect them. Do you know what the word respect means?!

      No, I will not respect a BIGOT.

  5. pecan 3.14159265 says:

    That’s a really, really scary photo. It just is. I need to crawl under my desk with a blanket and cry now.

  6. Sean Masters says:

    I believe that employee was fired for horrific abuse of the English language and not because he or she disagreed with Countrywide’s policies.

  7. robdew2 says:

    Classy photo guys, classy.

  8. RodAox says:

    I wonder if they are the only ones guilty about this… I heard a couple stories back in the day in which how the local banks kept african americans out of communities by denying their loan approvals within a certain zip code….

    • spoco says:

      @RodAox: Happens to this day here in Mississippi. We have one African American family in our subdivision – he’s a doctor and his wife is a college professor. He paid cash for his house. I hear other neighbors refer to him as the n around the corner and it makes me sick.

      This is a nice, upscale neigbborhood.

      • Spectre1125 says:

        @spoco: The other side of that coin is white flight. I would look it up if you’re not familiar with the term.

        • spoco says:

          @Spectre1125: I am very familiar with the term. Exhibit A: Jackson, Mississippi.

        • econobiker says:

          @Spectre1125: White Flight was also a technique used to bust out neighborhoods and reduce the proprety values for when some developer wanted to gather up the properties for some other non-residential project.

          Reverse of this was found in Lakewood, NJ when the a certain religious minority group began to run middle class African Americans out of the town by buying a house, renting it to illegals and driving down the property values so that the other neighbors bailed out. Once all the properties were gathered up under one developer somehow the town ordinances were changed for more expensive and densely packed condos. And Lakewood,NJ became like some areas of New York City…

    • sanjsrik says:


      And who can forget Denny’s barring the Secret Service agents from entrance because they were black?

      or the doctor who was tackled outside of a broadway show in front of his 8-month pregnant wife because he called the ticket-seller and because of his last name and that he wanted to a good view of the stage, was deemed by the telephone ticket agent as only wanting a good view so he could shoot someone.

      Or the Fedex guy who wrote “Terrorist” on the signature line of the Pakistani (turbaned) man who signed for said package.

      Racism is out there, it’s alive, well, and kicking.

      • nakedscience says:

        @sanjsrik: “Racism is out there, it’s alive, well, and kicking. “

        God damned, everyone is aware of this, stop trying to pretend like you’re the only one who knows it. You’re not. Do you get off on being obvious?

  9. badgeman46 says:

    Just an observation without judgement. It takes some serious balls to post blackface on any blog!

  10. spoco says:

    The photo is ridiculous, Consumerist. You’re better than that.

    I live in Mississippi – perhaps the most racist state in the union. We have not been hit entirely hard by the economic crisis (unemployment is at 8.2%, the average for the last 20 years is close to 7.6%). However you are hearing of foreclosures in primarily African American communities – probably dealing with this.

    I’m a financial counselor – I met with a white couple a couple of weeks back that had no idea what they were paying. They live in a primarily African American neighborhood.

    Turned out their mortgage interest rate was nearly 11%. We ran their credit and it seemed to be on par, score wise with receiving a 6% loan. We’re trying to get them into something lower but they have a pre-payment penalty- its going to be tough to get them out from under it.

    My point is that maybe its the poor communities and not the race.

    • Eyebrows McGee (now with double the baby!) says:

      @spoco: “perhaps the most racist state in the union.”

      Doesn’t Mississippi have either the most or second-most elected black officials?

      • spoco says:

        @Eyebrows McGee (now with more baby!): We have the most, but remember we also have the most segregated communities. Rarely will you find a community/county with numbers like White 55%, Black 43%, Other 3%. Afircan Americans lead those communities, and there are a bunch of them in the Delta (which is close to 90% African American). There are zero African Americans holding statewide office, nor will there ever be. It just will not happen here.

    • pop top says:

      @spoco: “My point is that maybe its the poor communities and not the race.”

      Did you seriously not read any of the articles? Let me restate this then: Affluent Blacks were also given subprime loans. It didn’t matter how much money they made or where they lived, they were still more likely to get subprime loans than their White counterparts.

      • spoco says:

        @squinko: I did read the article. My point is that there are affluent black neighborhoods, as well.

        • pop top says:

          @spoco: Wait. First you say “My point is that maybe its the poor communities and not the race,” and then you say “My point is that there are affluent black neighborhoods, as well”. You can’t say your point is that poor neighborhoods are being targeted, and then turn around and say that there are affluent Black neighborhoods being targeted. That doesn’t explain at all why affluent Blacks got subprime loans.

    • SacraBos says:

      @spoco: I hope you do. That sounds like fraud, especially since they are adding in a pre-payment penalty.

    • sanjsrik says:


      Indiana is more racist than Mississippi, and believe it or not Arizona voted to NOT make Martin Luther King, Jr a holiday state-wide.

      HOW racist do you have to be NOT to take a day off?

  11. ARP says:

    Nothing to see here, its all the fault of people buying more house than they can afford. Mortgage lenders did nothing wrong. Move along.

  12. SacraBos says:

    I was pouring some Aunt Jemima syrup on my Famous Amos cookies this morning, … well, racism can show up anywhere. And while the black-face (you must have used a VERY dark color in order to hide that neon orange) is racist, it’s the very ideal picture to highlight the racism. Don’t hide racism, but bring it out in the open – and such a picture does this well.

    Here in Dallas, we had a black Councilman which was insulted by someone referring to some unrelated department as a “black-hole”. How racist was that? No joke, he tried to demand an apology, claiming that “black” was always used in a negative connotation, never “white”.

    I should have sent a White Elephant gift to him for making such stupid remarks.

    • pop top says:

      @SacraBos: Back in the early 90s, my dad had a co-worker get mad at and try to sue a local newspaper for having an article about black squirrels being thieves. She truly believed there was no such thing as black squirrels, that the paper was being racist by saying the squirrel was black, and that the picture of the squirrel used with the story was colored black for the article.

  13. karmaghost says:

    T-minus 10 seconds before that picture gets pulled… 10… 9… 8…

  14. Anonymous says:

    As a former Funder at Full Spectrum(Countrywide) I saw a lot of strange loan programs that made me curious as to why anyone would consider signing at all. I have no idea about the race related comments – I was at the processing phase. By the time it got to me Underwriting had approved everything…

    I left in 2005, already had the feeling that their business model was unsustainable. Thank god.

  15. Anonymous says:

    As a former Funder at Full Spectrum(Countrywide) I saw a lot of strange loan programs that made me curious as to why anyone would consider signing at all. I have no idea about the race related comments – I was at the processing phase. By the time it got to me Underwriting had approved everything…

    I left in 2005, already had the feeling that their business model was unsustainable. Thank god.

  16. Borax-Johnson says:

    How about a kitten in blackface?

  17. JGKojak says:

    This is important not only due to the racism, but because it says:


    You were WRONG!

    People (black and white- I’m sure there were a lot of shenanigans based on poverty/education as well) went to mortgage brokers, expected that regulations were being enforced and that they were being told the truth, and were sold (as in manipulated, persuaded, motivated) bad mortgages because they were told that was all they could afford. Which was simply not true.

    Were there are few people buying half million dollar homes that shouldn’t? Yes. But in a large number of cases that’s NOT what happened.

  18. modelchick8806 says:

    Someone needs to seriously take down that photo and issue an apology for being offensive.

  19. ReidFleming says:

    I saw the photo for this article and my first thought was, “I bet a bunch of people misinterpret this as ‘blackface’.” I was not disappointed. I’m sure Ben thought this was simply exaggerating the horrific fake tan of, um, that one dude who is colored wrong (chemically).

    It reminds me of the guy that was demonized for using the word ‘niggardly’ since it sounds like another word but isn’t of the same etymology.

    Maybe Ben’s ‘apology’ needs to be something along the lines of, “Sorry you didn’t understand the reference.”

    • Cant_stop_the_rock says:


      Considering the context, I don’t think Ben thought he was just exaggerating the guy’s tan. I’m also quite certain that he had no racist intent, but the picture still was a very bad idea.

  20. John Tyler says:

    (And modelchicks.)

    I’m just as annoyed with Wells Fargo/Countrywide as the next person… Racism should be dead as dead can be, and I am sorry to see that it isnt.

    But lets stick with what is real problem is, can we please?

    WF got caught bigtime discriminating. For that, they will likely lose their company, and any credibility they ever had is gone.

    But IMHO, the problem here stems way beyond both logging into your browser, and seeing a blackface, and even, to an extent, beyond finding out that you’ve been played for your race.

    The problem is, that for decades, people of ALL colors, have been getting shoveled into homes they cannot afford. And I agree with the previous poster, that it was rarely a case of “buying too much home”. Everyone got screwed. Yeah, checking “Black” in your form shunted you into a specific catagory of being screwed, but checking “White” only meant being slotted into different “GoFuckYourself” void.

    Racism is bad. But the fact that the previous generation all grew up allowing every goddamn instituion from health care, to food, to commerce, to banking, free reign to take everyones money, and deliver -nothing-, is worse. Much MUCH worse.

  21. HiPwr says:

    Chris Dodd is rolling in his grave.

  22. nocturnaljames says:

    Black foreclosure rates are 3x that of whites (source: AARP). I don’t blame any bank for being cautious, considering the economic climate. Our banking system is privatized, which means they don’t have to give you a loan if they don’t want to. It also means there are many choices, if you don’t like the way you are treated at a bank, go to another one. Get over it… and stop being so god damn sensitive about race, I can’t believe people are offended by the photo and expect an apology just for that.

    • SlappySquirrel says:

      @nocturnaljames: So do you think black foreclosure rates being higher has anything to do with them being offered predatory loans with nastier terms?

    • zlionsfan says:

      @nocturnaljames: Actually, that’s not quite what the study said.

      Over 684,000 Americans age 50 and over were either delinquent or in foreclosure at the end of 2007. While foreclosure rates on first mortgages are lower for borrowers over 50 than for borrowers under 50, Americans age 50 and over represent about 28 percent of all delinquencies (30 to 180 days late) and foreclosures in the current crisis. Among mortgage holders age 50 and over, African American and Hispanic borrowers both have foreclosure rates of 0.51 percent, compared to a rate of 0.19 percent for Caucasians. Older Americans appear particularly vulnerable to house price declines and to subprime loans.

      For many of these people, by the time they discovered what had happened, going to another bank wasn’t an option: they were already suckered into a predatory loan and couldn’t get out.

      It seems as though there were other banks in addition to Wells Fargo and Countrywide that made your statement self-fulfilling: they deliberately steered minorities toward high-risk loans, causing more of them to default, which then “creates” a higher default rate, which “justifies” higher-risk loans.

      Predatory behavior, whether racially-targeted or not, isn’t something we should just “get over”. It’s something we should expose.

  23. faintandfuzzies says:

    This person is making false accusations against Countrywide.

    I independently contracted to CHL for four years and helped design the current loan generation system which BofA has since adopted. Entering the ethnicity & race are mandatory data inputs which CANNOT be ignored! If you do not enter the data, the system will not consider the 1003 form complete and therefore will not continue the process until they are entered. Even the legacy loan generation system has the same data policies.

    This person is simply lying! Even if they figured out a way to get around the system (which I doubt), they deserved to have a short tenure and should also have charges brought against them for falsifying a government legal document so a loan would force to be approved.

  24. JAG42 says:

    Way to stir the racial pot! Are blacks not able to use Lending Tree (or at least shop around for the biggest purchase of their life?)? Portraying minorities as being easily duped and stupid is not productive and only serves the NAACP’s antiquated view of race relations in America. If people think racism is alive and well the NAACP, Jesse Jackson, Al Sharpton and the other race baiters benefit! Are there racists? Yes, of all races. Is it the status quo? Not at all.


  25. Anonymous says:

    Of course, in fairness when you consistently PAY YOUR BILLS ON TIME that often leads to a HIGH CREDIT SCORE and more favorable loan terms. Minorities, as well as a lot of trailer trash, tend to fail at point #1 then get mad about point #2. “responsible” citizens who also end up living way above their means also have issues with #2 and don’t understand why.
    Just because you’re a minority doesn’t entitle you to a low-cost home loan with bad credit or some other looming negative mark on your bureau report. The race card can’t supplant basic economics and neither can every so-called minister marching around singing some Koombya song on CNN. You are not entitled to home ownership if you make $7 an hour in a dead-end job, on public aid, regardless of what Socialists, ahem, Democrats or civil rights “leaders” tell you.

    GO ahead and call me a racist, let the flaming begin…

  26. nicolebuckingham says:

    Hi ya! Black person with experience here…Here is my personal experience with…MORTGAGE LOAN RACISM-ism-ism-ism!

    1) Yes, lenders must identify the applicant’s “race” on loan applications. BUT if they never see you in person, they don’t have to. I purposely completed my app over the phone so that my race would never be a factor. I also made sure my voice did not indicate ethnicity. I didn’t meet face-to-face with anyone at the mortgage company until I had to sign the papers. I could tell the guy was surpised when he met me, but everything was cleared by that time, and it went off without a hitch.

    2) The reason I did #2 is because my sister and her husband caught hell when they applied for their loan. They are high-earning, educated professionals with great credit, but the mortgage company (Countrywide) repeatedly tried to force them into exotic loans with high rates and fees. My sister was literally arguing with the lender that she did not want a loan like that (and didn’t need it). What they went through was so terrible and wrong that it completely ruined the whole “we bought our own piece of the American dream!” experience. Countrywide finally backed off, but by that time, my sister and her husband had moved on. They knew they didn’t need to take such crap and so they found someone else. Unfortunately, not everyone is educated enough to know these things.

    3) This is no different than the higher premiums that insurance companies charged blacks for decades. My grandmother got a very small settlement (a few hundred $$ I think) in one of the class actions suits a few years ago because she had been overcharged (for DECADES!)and her mother too! Either way, it doesn’t take away the sting.

    4) As for those crying “get over it,” remember, these things always start with the easy targets (in this case blacks) but the net always widens…so be careful before you dismiss.

    5)TO CONSUMERIST: The pic is offensive. Blackface just isn’t funny unless you think blackface is funny…Newsflash: You do have black readers!