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Mayor, Attorney General Address Foreclosure Crisis

Attorney General Investigating Two Mortgage Companies

POSTED: 6:56 pm CST March 7, 2008
UPDATED: 7:06 pm CST March 7, 2008

Mayor Richard M. Daley announced on Friday he wants new legislation designed to help homeowners, as well as those who rent.

NBC5's Phil Rogers reported on Friday that approximately 1,300 foreclosures in Chicago last year were on buildings which multiple families called home. One family, the Moores, were being evicted from their apartment because their landlord defaulted on the building's $159,000 mortgage.

"Many have either paid their rent on time or they've tried to pay their rent if they can find who to give it to," said housing attorney Kathleen Clark. "Sometimes, the landlords disappear."

On another front, Illinois Attorney General Lisa Madigan said she wanted to know why black and Hispanic homeowners sometimes end up paying higher interest rates than white families in the same neighborhoods.

"Is this because of credit, or is it discrimination?" Madigan said.

Madigan said she has subpoenaed the records of the state's two biggest mortgage companies, Countrywide and Wells Fargo, citing evidence that even minority families making more than $100,000 per year are three times more likely to pay higher rates.

"They are being put into high-cost loans more often than even whites making just $30,000 a year," Madigan said.

Both Countrywide and Wells Fargo insisted they deliver loans only on the basis of credit risk, Rogers reported -- not race. Both said they welcome the chance to explain their practices in the attorney general's investigation.


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