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.
[IMAGE]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 â€" at the back-end of the process â€" 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 data
[COLUMN_BREAK]soon 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.""