Joseph H. Hogsett, the United States Attorney for the Southern District of Indiana (which includes Indianapolis), has announced an effort to locate remaining Indiana victims who are entitled to financial assistance as part of a $335 million settlement between the Department of Justice and Countrywide Financial Corp.
The agreement stems from allegations of discriminatory lending practices from 2004 to 2008 that investigators believe affected more than 1,300 African-American and Latino Hoosiers on the basis of race.
“We want all Hoosiers to know that this historic settlement provides financial relief to many families that were victimized by what we believe was a scheme to target minorities in this state,” Hogsett said. “The effects of such discrimination don’t just tear apart communities – they also deny thousands their fair chance at the American dream.”
Hogsett said that under the terms of the $335 million national settlement, Indiana borrowers who have been identified by the Department of Justice as victims of lending discrimination are entitled to payments if they contact the Settlement Administrator before the March 29 deadline.
He stressed that, while many Hoosier victims had already been notified of their rights under the settlement, more than 400 have either not yet been located, or have failed to respond to notifications of their entitlement to payments from the fund.
As a result, the United States Attorney’s Office’s Civil Rights Task Force is urging individuals who believe that they may have been a victim of the alleged lending discrimination by Countrywide to contact the independent Settlement Administrator, Rust Consulting, by telephone at 1-800-843-5148 or by email at info@CWFLSettlement.com.
According to court documents, it is alleged that between 2004 and 2008, Countrywide charged more than 200,000 African-American and Hispanic borrowers across the country higher fees and interest rates than non-Hispanic white borrowers in both its retail and wholesale lending. The complaint alleges that these borrowers were charged higher fees and interest rates because of their race or national origin, and not because of their creditworthiness or other objective criteria related to borrower risk.
It is also alleged that Countrywide discriminated by steering thousands of African-American and Hispanic borrowers into sub-prime mortgages when non-Hispanic white borrowers with similar credit profiles received prime loans. An investigation has shown that all the borrowers who were discriminated against were qualified for more preferable Countrywide mortgage loans according to Countrywide’s own underwriting criteria.
Those sub-prime loans often carried higher-cost terms, such as prepayment penalties and exploding adjustable interest rates that increased suddenly after two or three years, making the payments unaffordable and leaving the borrowers at a much higher risk of foreclosure.
Hogsett noted that this was the first time that a national settlement provided financial relief for borrowers who were steered into loans based on race or national origin.
Due to the number of Indiana residents who have yet to file for assistance under the settlement, he recently instructed the U.S. Attorney’s newly-formed Civil Rights Task Force to assist in efforts to locate and assist these victims.
Hogsett pointed out that the Civil Rights Task Force has implemented a new federal civil rights complaint form to make reaching the Task Force as simple as possible. Copies of the form are available online at http://www.justice.gov/usao/ins/, and information collected through the forms will be shared with law enforcement and administrative agencies. According to federal law, all of these local activities will be done in partnership with the Civil Rights Division of the United States Department of Justice.
“Having spent my entire legal career working in the area of individual civil rights, this will always be a personal priority of mine,” Hogsett noted. “Full human equality of opportunity is what makes us uniquely American.”
A copy of the complaint and settlement order, as well as additional information about this case, can be obtained from the DOJ at: http://www.justice.gov/crt/about/hce/caselist.php
