Posted on 01/19/2017 2:27:10 PM PST by SeekAndFind
JPMorgan Chase & Co has agreed to pay $55 million to settle a U.S. Justice Department lawsuit accusing it of discriminating against minority borrowers by allowing mortgage brokers to charge them more for home loans, a person familiar with the matter said on Wednesday.
The U.S. Justice Department complaint, filed in Manhattan federal court on Wednesday, accused the bank of willfully violating the U.S. Fair Housing Act and the Equal Credit Opportunity Act between 2006 and 2009 and showing "reckless disregard" for the rights of at least 53,000 African-American and Hispanic borrowers.
"Weve agreed to settle these legacy allegations that relate to pricing set by independent brokers," JPMorgan spokeswoman Elizabeth Seymour said. "We deny any wrongdoing and remain committed to providing equal access to credit."
A spokeswoman for U.S. Attorney Preet Bharara had no immediate comment.
The alleged discrimination involved so-called wholesale loans that were made through mortgage brokers the bank used to help originate loans, the complaint said. Chase allowed brokers to change rates charged for loans from those initially set based on objective credit-related factors, the complaint said.
As a result of that discretion, minorities were charged more for home loans than white borrowers with the same credit profile, paying tens of millions of dollars in additional mortgage costs, the complaint said.
An African-American taking out a $191,100 loan on average paid $1,126 more over the first five years of the loan than a white borrower. An Hispanic borrower with a $236,800 loan paid on average $968 more than a non-Hispanic white borrower, the complaint said.
Chase did not require mortgage brokers to document the reasons for changing rates and failed to address racial discrimination, encouraging it to continue, the complaint said.
(Excerpt) Read more at reuters.com ...
Jamie Dimon was an early backer of Obola, I have very little sympathy for him or the firm on this as well as the other fines the firm paid over 8 years - I wonder if he has any regrets?
When your credit rating is poor the lenders take a higher risk loaning you money, so they charge a premium on the interest rate. Not surprisingly, these loans tend to be foreclosed on more often due to the choices made by people with poor credit ratings. And usually they got poor credit ratings by making poor prior choices.
These “settlements” fund Leftist Social Programs, or at least they did until tomorrow. ;-)
Pocket change...
Doesn’t this harken back to the Dodd-Frank fiasco?
Title XIV : Subtitle B Minimum Standards for Mortgages[edit]
In effect, this section of the Act establishes national underwriting standards for residential loans. It is not the intent of this section to establish rules or regulations that would require a loan to be made that would not be regarded as acceptable or prudential by the appropriate regulator of the financial institution. However, the loan originator shall make a reasonable and good faith effort based on verified and documented information that at the time the loan is consummated, the consumer has a reasonable ability to repay the loan, according to the terms, and all applicable taxes, insurance (including mortgage guarantee insurance), and other assessments. Also included in these calculations should be any payments for a second mortgage or other subordinate loans. Income verification is mandated for residential mortgages.[180] Certain loan provisions, including prepayment penalties on some loans, and mandatory arbitration on all residential loans, are prohibited.[181]
This section also defined a Qualified Mortgage as any residential mortgage loan that the regular periodic payments for the loan does not increase the principal balance or allow the consumer to defer repayment of principal (with some exceptions), and has points and fees being less than 3% of the loan amount. The Qualified Mortgage terms are important to the extent that the loan terms plus an Ability to Pay presumption create a safe harbor situation concerning certain technical provisions related to foreclosure.[182]
Add this to Obama’s list of commutations and clemencies.
HOW MUCH of this money is the Obama “Justice” department going to immediately hand over to La Raza, Acorn, the ACLU, Southern Poverty Law Center?
{Standard procedure during the Holder/Thomas Perez/Obama administration}
>
Jamie Dimon was an early backer of Obola, I have very little sympathy for him or the firm on this as well as the other fines the firm paid over 8 years - I wonder if he has any regrets?
>
Regrets? It’s called a ‘kick-back’, not a fine.
JPMorgan = Soros
Sue and settle = reparations before Odunga leaves office.
Was it Frank-Dodd that forced banks to give out high-risk loans?
All that money will go to leftist activist groups and Democratic Party fronts as part of the settlement.
Community Reinvestment Act Blackmail, nothing more.
What were the prospective buyers credit scores?
After all, it’s the only relevant question.
“HOW MUCH”?
None. Zip.
And how do you kknow that?
Perhaps, with a new Department of Labor, we’ll begin to see the principals of transgressors like JP Morgan serve some jail time.
Fining a company like this does little good. JPM, like all companies, has no money of its own. The money will ultimately come from the stockholders and/or bondholders.
Because the Trump DOJ will be the party receiving the money. Or Treasury, or some other department.
The money will be received first by the Federal government, then disbursed somewhere.
But it won’t be to a bunch of lefties, of that everyone can be sure.
“As a result of that discretion, minorities were charged more for home loans than white borrowers with the same credit profile, paying tens of millions of dollars in additional mortgage costs, the complaint said.”
It appears the credit ratings would be the same; that leads me to suspect the AREAS were the problem. Our government wants it both ways; they forced the banks to lend to high-risk minority borrowers (who may have great credit ratings, but bought in urban dumps), then accuses them of deceiving those same borrowers into borrowing too much (and I guess in this case, building risk into the fees).
That the government blames the financial crisis on risky loans, after forcing reluctant banks to make those loans in the first place, is mind-boggling.
I work with blacks who briefly owned homes in abandoned areas of the Newark NJ area and are now looking to get out of both the homes and the loans; there are just no buyers because the concept of urban revival is a myth (as long as mass relocations aren’t involved).
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