|Robert Gnaizda General Counsel 510-926-4006 office firstname.lastname@example.org||Preeti Vissa Community Reinvestment 510-926-4022 office email@example.com|
Berkeley, CA – The Greenlining Institute, a national public policy and advocacy center that has been highly critical of Countrywide’s predatory subprime lending, had urged Attorney General Brown to bring suit at a December 2007 meeting. The organization labeled the so-called $8.7 billion dollar settlement “ far less than appears on the surface.”
Greenlining’s General Counsel Robert Gnaizda said “the terms of the settlement, unless the BofA does more than is required, are likely to be far less than what Sheila Bair, the Chair of the FDIC, easily implemented in the recent IndyMac takeover.”
Although Attorney General Brown claims that the settlement is worth $8.7 billion, or almost twenty times greater than the largest predatory lending settlement in history, the vast bulk of this amount is attributable to the taxpayers’ $700 billion dollar bailout of Wall St. and the $300 billion dollar FHA program that went into effect on October 1, 2008. Very little of the dollar amount is in excess of what the BofA would have been required to do to be eligible for the various bailout funds made available since the Attorney General brought suit in June 2008. The total of enumerated payments is just $87 million dollars , or of no significance to a financial institutions with approximately $2 trillion dollars in assets that will be the beneficiary of billions of dollars of taxpayer funds.
The settlement also ignores the need for the BofA to invest at least $200 million dollars in home counseling and loss mitigation efforts to maximize the value of the settlement to homeowners with subprime and option ARMs mortgages. This could be an issue before the Federal Reserve when it rules on the pending BofA acquisition of Merrill Lynch. If, however, the settlement is as significant and comprehensive as the Attorney General contends, it is highly likely to affect both JP Morgan Chase’s acquisition of WaMu’s subprime loans and Wells Fargo/Citigroup’s proposed acquisition of Wachovia’s option ARMs.
The Executive Director of Mabuhay Alliance Faith Bautista, who organized the first demonstration against Countrywide on November 21, 2007 and urged Attorney General Brown at a meeting on December 11, 2007 to take action against Countrywide, said, “we congratulate the BofA for recognizing the problem but far more must be done to reach out to the communities affected, particularly low-income African Americans, Latinos and Asian Asians.”