“The superior man seeks what is right; the inferior one, what is profitable.” – Confucius
Much has been written about Countrywide (CFC) over the last couple of weeks, including the comprehensive coverage provided by Gretchen Morgenson at The New York Times in Inside the Countrywide Lending Spree.
She writes, “Few companies benefited more from the mortgage mania than Countrywide, among the most aggressive home lenders in the nation. As such, the company is Exhibit A for the lax and, until recently, highly lucrative lending that has turned a once-hot business ice cold and has touched off a housing crisis of historic proportions.”
But this post isn’t about shoddy lending practices and the subprime mortgage debacle. There's no use flogging a dead horse. Rather, this is a story about a lesbian couple just trying to keep their home. It has nothing to do with adjustable-rates or using equity like cash from the ATM machine.
Photo:Puja, Creative Commons, Flickr
This is a post about foreclosure, and not for the reason you might think. In May 2007, Lambda Legal filed a lawsuit on behalf of a lesbian couple after Countrywide refused to add one partner to the other’s existing mortgage and then they subsequently threatened to foreclose on their home. Here’s the summary from Lambda Legal:
“After falling in love and making a lifetime commitment, Adola DeWolf, 49, a teacher for juveniles in the justice system, and Laura Watts, 42, a college administrator, decided to move in together and share a mortgage. Watts sold her house and moved into DeWolf’s home outside of Rochester, New York. To make sure both partners were protected in case of death, and to share the responsibility for the mortgage, they contacted DeWolf’s mortgage company, Countrywide, to add Watts to the mortgage.”
“Countrywide instructed the couple to take several steps, which included a change to the deed. But after the couple followed those steps, Countrywide responded by saying the change to the deed was unauthorized and threatened to foreclose on the house if the almost $80,000 balance on the mortgage was not paid in 30 days. The company said it did not recognize domestic partners as family. Lambda Legal filed a lawsuit on behalf of the couple. One claim argues that under the federal Equal Credit Opportunity Act creditors cannot discriminate against applicants based on marital status.”
Allison Einbinder, one of our contributors at Queercents covered this story when it broke and wondered how the news would affect queer views of Countrywide: Will LGBT couples rush to change their mortgages?
She forwarded the article to members of a Bay Area lesbian listserv and received varied responses. She writes, “One woman commented she has a mortgage with Countrywide for property in California. She transferred her mortgage to a trust with no problem. Although it’s a slightly different scenario, she reminds us the laws differ from state to state. In California our partners can be on our deed without being on the mortgage and it’s not a problem. She also mentioned New York has additional common laws non-residents may not be familiar with.”
“The second woman told the story of her experience with Countrywide. She held her primary mortgage with them and recently took out a home equity line of credit. She bluntly stated ‘it was not a good experience’. She wrote them when they solicited feedback about her experience and never heard a reply. While I’m not sure her issue with Countrywide involved a partner situation, their lack of response is telling.”
“Finally the third e-mail response was a positive experience. The woman and her partner refinanced their mortgage with Countrywide in 1999 and got a great deal through their broker. They had no problems putting both partners on the mortgage. Eight years later, the couple is still together and still with the Countrywide mortgage.”
The only coverage this story got was from the gay press and political blogs. The mainstream media didn’t care. This prompted Einbinder to ask the queer community, “How do you feel when incidents like this are kept quiet or out of the main spotlight?”
Should we consider changing lenders because of Countrywide’s discrimination? I maintain rental properties where I carry a mortgage or two with them and although I disagree with the treatment of the lesbian couple, I would be hard pressed to shop my business now. I locked in a great rate years ago. I’m glad the company has been exposed. But for me personally, can I really afford to take my business elsewhere?
As someone trying to be an ethical consumer and investor, it’s these types of situations that make the straddle a challenge. At Queercents, we have a series called WWYD (of course, Jesus is free to comment too). So if you were in the same situation, what would you do?
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Nina blogs about money at Queercents.
Disclosure: I do not own stock in Countrywide. That’s probably a good thing these days.