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Bank of America has paid $335 million to settle claims that its mortgage lending unit, Countrywide Financial, discriminated against African American and Latino borrowers, the Justice Department has announced.
Bank of America has paid $335 million to settle claims that its mortgage lending unit, Countrywide Financial, discriminated against African American and Latino borrowers, the Justice Department announced today.
It’s the largest residential fair-lending settlement in history, the New York Times reported.
According to CNN:
Attorney General Eric Holder said a federal probe found discrimination against at least 200,000 qualified African American and Latino borrowers from 2004 to 2008, during the height of the housing market boom. He said that minority borrowers who qualified for prime loans were steered into higher-interest-rate subprime loans.
Holder said that a qualified African American homebuyer in Los Angeles borrowing $200,000 in 2007 paid an average of about $1,200 more in fees than a similarly qualified white borrower, Forbes reported.
“The department’s actions against Countrywide makes clear that we will not hesitate to hold financial institutions accountable, including one of the nation’s largest, for discrimination,” Holder said today, according to the New York Times. “These institutions should make judgments based on applicants’ creditworthiness, not on the color of their skin.”
Bank of America officials said the discriminatory practices took place before the bank bought Countrywide in 2008, CNN reported.
"Bank of America's practices are not at issue," spokesman Dan Frahm said in a statement, according to CNN. "We are committed to fair and equal treatment of all our customers. We discontinued Countrywide products and practices that were not in keeping with our commitment."
Money from the settlement will be distributed to borrowers who were identified by the probe, CNN reported.