Friday, December 30, 2011

Mortgage Discrimination Suit Settled for $335 Million

The US Department of Justice settled a mortgage discrimination lawsuit with Countrywide Financial Corporation (CFC) for $335 million dollars on December 21, 2011. Here. The payment will resolve charges that Countrywide engaged in widespread discriminatory lending practices against Black and Hispanic consumers. The discrimination too place between 2004 and 2008. Countrywide Financial Corporation is now part of Bank of America.

The DOJ alleges that Countrywide would charge non-White consumers, with credit histories equivalent to Whites, higher fees and higher interest rates. It would also "steer" them to risky types of loans such as sub-prime mortgages or balloon payment schemes.

The DOJ stated that 200,000 Black and Hispanic borrowers were affected. "The complaint alleges that borrowers were charged higher fees and interest rates because of their race or national origin rather than their creditworthiness or risk."

You can read the DOJ complaint here.

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