Bank of America on Wednesday was ordered by the Justice Department to pay a $335 million settlement for the company’s part in a discriminatory lending market that denied black and Hispanic home buyers the approval needed to purchase homes.
The settlement involved Countrywide, a company that BofA purchased in 2008.
According to the Wall Street Journal the $335 million is the “largest residential fair-lending settlement in history.”
Allegations against Countrywide involved more than 200,000 minority borrowers and found that Countrywide charged those lenders more money than they charged to white borrowers with similar credit profiles from 2004 through 2008.
According to the filing Countrywide lenders forced black and hispanic borrowers to take out subprime loans even when they qualified for the lower rate home loans.
According to Illinois Attorney General Lisa Madigan the settlement is:
“A very important step in state and federal efforts to hold mortgage lenders accountable for the devastation they have caused to American families and their finances.”
Because of the settlement borrowers who received bad loan arrangements will receive at least some of their money back.
Speaking about the settlement Dan Frahm, a Bank of America spokesman, said in a statement:
“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.”
Do you believe you were offered a less than stellar loan based on your race? Share your Countrywide lending story in our comments section.