Real Estate & Property Law
Bank of America to Pay Record $335M to Settle Claims of Countrywide Mortgage Lending Bias
Posted Dec 21, 2011 3:31 PM CST
By Martha Neil
Updated: Bank of America Corp. has agreed to pay a $335 million to settle claims that the Countrywide Financial unit it purchased discriminated against minorities by giving them mortgages with less favorable terms than the ones granted to whites.
An independent monitor will be appointed to determine how the settlement should be distributed among alleged victims, reports the Money & Company blog of the Los Angeles Times.
The case was brought by the U.S. Department of Justice and the Illinois attorney general. The DOJ says it is the highest settlement ever in a residential fair-lending case, reports the New York Times (req. req.).
The pattern and practice case reflected Countrywide's claimed conduct between 2004 and 2008, before it was acquired by the Bank of America. Some 200,000 minority borrowers allegedly were charged higher mortgage rates than comparable white borrowers, while 10,000 allegedly were put in costly subprime mortgages.
A Bank of America spokesman stressed that the conduct occurred prior to its involvement.
“We are committed to fair and equal treatment of all our customers, and will continue to focus on doing what’s right for our customers, clients and communities,” said spokesman Dan Frahm. “We discontinued Countrywide products and practices that were not in keeping with our commitment and will continue to resolve and put behind us the remaining Countrywide issues.”
Updated at 6:37 p.m. to include New York Times coverage.