New York Moves Forward with Mortgage Investigation
Image via Wikipedia
One of the questions that has some concerned has little to do with mortgage fraud. It has to do with the way mortgages have sometimes been handed out. The New York attorney general’s office, back in 2005 (when Eliot Spitzer was a.g.) launched an investigation into whether or not mortgage lenders were discriminating. At issue was whether minorities were forced to get mortgages with higher interest rates than white borrowers. The probe looks at discrimination by race, alleging that some borrowers were treated as “risky” due to their race, rather than due to other factors such as income and credit score.
As expected, mortgage lenders sued. The Office of the Comptroller of the Currency also sued, saying that such a probe was outside state jurisdiction. The case has risen through the ranks, reaching the Supreme Court. And the justices have handed down their ruling, allowing New York to proceed — within certain limitations. CNN Money reports on the Supreme Court verdict:
The justices overturned part of a ruling by a U.S. appeals court that entirely blocked the state office from investigating or enforcing the fair lending laws against national banks because they are subject instead to federal regulation.
In the court’s main split opinion, Justice Antonin Scalia concluded the state attorney general cannot issue subpoenas, but can bring judicial enforcement actions.
The move does not give the state of New York a complete victory, but it does provide some leeway. New York received support from every other state in the union, many of which are concerned about regulation and consumer protection. Even real estate agents supported New York in its action. The federal government was against New York, however, stating that federal regulators should be in charge of enforcement. However, the track record for enforcing the Fair Lending Act has not been that great. Perhaps allowing such a probe to go forward will increase fairer mortgage practices.
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=9ad4601e-afd4-48ac-858d-d5568c6fc699)
July 6th, 2009 at 1:30 am
[…] New York Moves Forward with Mortgage Investigation Image via Wikipedia One of the questions that has some concerned has little to do with mortgage fraud. It has to do with the way mortgages have sometimes been handed out. The New York attorney general’s office, back in 2005 (when Eliot Spitzer was a.g.) launched an investigation into whether or not mortgage lenders were discriminating. […] […]