Bank of America has agreed to pay $335 million to resolve claims that it’s Countrywide subsidiary engaged in widespread discrimination against more than 200,000 qualified African-American and Hispanic borrowers during the housing boom years of 2004 to 2008.
The Justice Department investigation concluded that Countrywide brokers charged higher fees and rates to minority customers who posed the same credit risk and profiles as Caucasian customers.
Countrywide also allegedly steered 10,000 minority borrowers into costly subprime mortgages when they qualified for regular loan programs. The odds of a minority applicant being steered into subprime instruments were more than two times greater than a non-Hispanic borrower with a similar credit score.
The investigation cited an example of Hispanic borrowers in Los Angeles paying $545 more in fees than non-Hispanic customers in 2007. Independent mortgage brokers handling Countrywide applications increased fees as much as $1,195 according to the Justice Department. Approximately two thirds of the victims in the case were Hispanic.
The settlement will provide monetary restitution to victims in an amount between several hundred and several thousand dollars. Larger amounts will be given to those who were steered into subprime mortgages.
Countrywide is no stranger to resolution of claims involving it’s mortgage business. In June 2010 Countrywide agreed to pay $108 million to settle charges that they charged inflated sums to customers struggling to keep their homes. An August 2010 settlement of $600 million was paid to resolve shareholder lawsuits over the company’s mortgage losses.
Wallingford Real Estate – Wallingford, PA 19086
