The largest settlement in history over fair lending practices
December 21, 2011 4:12 PM Subscribe
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Bank of America agreed to pay $335 million to resolve allegations that Countrywide Financial engaged in widespread discrimination against African-American and Hispanic borrowers on home loans. The Department of Justice is calling this the largest settlement in history over fair residential lending practices
. According to the DOJ’s complaint, Countrywide systematically charged more than 200,000 African-American and Hispanic borrowers higher fees and interest rates than white borrowers with similar credit profiles.
The suit also claims that Countrywide steered more than 10,000 minority borrowers into costly subprime mortgages
when white borrowers with similar credit profiles received prime loans. The settlement will be used to compensate victims of Countrywide’s discriminatory mortgage loans from 2004 through 2008, prior to Countrywide's acquisition by Bank of America, when it originated millions of residential mortgage loans as the nation’s largest single-family mortgage lender. The settlement is subject to court approval.
Earlier this year Countrywide refunded $108 million in refunds to more than 450,000 homeowners who were overcharged for property inspections and other fees
, which was at the time one of the largest mortgage-related settlements ever brought before the Federal Trade Commission. Last summer Countrywide agreed to pay out $600 million to settle shareholder lawsuits
that the mortgage giant concealed mounting losses.