The U.S. Department of Justice says in light of the mortgage crisis, it has
"made fair lending a top priority" and will be reviewing the Treasury's Home
Affordable Modification Program (HAMP) for possible violations. Testifying before a House subcommittee last week, Assistant Attorney General
Thomas E. Perez told lawmakers that the Justice Department is focusing on
potential fair lending violations "where much of the lending activity is
occurring today - at the back-end of the process - in mortgage
modifications." With HAMP being the largest loan modification undertaking in
history, that makes it a prime target for scrutiny. "We want to be sure homeowners are not again subjected to abusive practices
as they attempt to get out from under unsustainable loans," Perez said. "We
will be getting datasoon from the Home Affordable Modification Program, disaggregated by race
and ethnicity, and the Non-Discrimination Working Group members are
collaborating on methods to analyze the HAMP data."Perez explained the Department of Justice has created a dedicated Fair
Lending Unit, staffed with lending attorneys, economists, and a math
statistician. He says the unit is focusing its efforts on the entire range
of abuses seen in the market, from traditional access to credit issues, such
as redlining, to reverse redlining and pricing discrimination.Perez stressed that these efforts are part of a larger, administration-wide
initiative to crack down on financial fraud and "eradicate those practices
that led to the financial meltdown."Perez says some have claimed that aggressive enforcement of fair lending
laws will ultimately hurt consumers and dampen the business climate, but his
experience leads him to disagree. "To the contrary, common sense consumer protection and promoting a sound
climate for lending go hand in hand, and are inextricably intertwined,"
Perez said. He added, "The absence of effective consumer protections and the dearth of
meaningful federal enforcement in recent years not only hurt communities
across the country, but also brought about staggering losses in the industry
and undermined the safety and soundness of so many lending institutions."
"made fair lending a top priority" and will be reviewing the Treasury's Home
Affordable Modification Program (HAMP) for possible violations. Testifying before a House subcommittee last week, Assistant Attorney General
Thomas E. Perez told lawmakers that the Justice Department is focusing on
potential fair lending violations "where much of the lending activity is
occurring today - at the back-end of the process - in mortgage
modifications." With HAMP being the largest loan modification undertaking in
history, that makes it a prime target for scrutiny. "We want to be sure homeowners are not again subjected to abusive practices
as they attempt to get out from under unsustainable loans," Perez said. "We
will be getting datasoon from the Home Affordable Modification Program, disaggregated by race
and ethnicity, and the Non-Discrimination Working Group members are
collaborating on methods to analyze the HAMP data."Perez explained the Department of Justice has created a dedicated Fair
Lending Unit, staffed with lending attorneys, economists, and a math
statistician. He says the unit is focusing its efforts on the entire range
of abuses seen in the market, from traditional access to credit issues, such
as redlining, to reverse redlining and pricing discrimination.Perez stressed that these efforts are part of a larger, administration-wide
initiative to crack down on financial fraud and "eradicate those practices
that led to the financial meltdown."Perez says some have claimed that aggressive enforcement of fair lending
laws will ultimately hurt consumers and dampen the business climate, but his
experience leads him to disagree. "To the contrary, common sense consumer protection and promoting a sound
climate for lending go hand in hand, and are inextricably intertwined,"
Perez said. He added, "The absence of effective consumer protections and the dearth of
meaningful federal enforcement in recent years not only hurt communities
across the country, but also brought about staggering losses in the industry
and undermined the safety and soundness of so many lending institutions."
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