Countrywide (Computers) Made Racist Sub-Prime Loans?

[Chimichurri]

This is an interesting rumor from The Consumerist that would be intersting to verify.

"...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) - 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 one day and started not inputing 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.

http://consumerist.com/352587/countrywide-made-racist-sub+prime-loans

[lapfog_1]

1. Computers don't make decisions...

software makes decisions. And people write the software.

Just because racism was institutionalized in software, it still had to start and continue in the form of racist management.

[Chimichurri]

2. Of course. That's the point.

[SoCalDem]

3. Around here, they probably made loans to dogs

and they are STILL on the air with ads to re-fi..or take equity out.. and debt consolidation

https://homeloans.countrywide.com/mortgages/default.aspx

[DCKit]

4. When it's done, consciously, by human beings, it's called "Redlining"

When it's done by programming Zip Codes and Census data into a computer, the corporation has a degree of deniability, yet the effect is even more damaging to the minority population, neighborhoods and entire cities: Computers and programs fed with the depth of data no human could manage, won't make a mistake when deciding which loans to deny or which (predatory or conventional) loan to issue.

This information makes the large mortgage companies look even more incompetent and predatory in light of the sub-prime mess. They're admitting they had all the economic data, at their fingertips, yet continue to claim ignorance of the economic disaster their practices would, eventually, cause.

Unless there was a pre-agreed bailout by the Federal Government, none of this makes any sense.