BofA in $335 million settlement over Countrywide loans
Bank of America Corp. has agreed to a record $335 million to settle allegations that its Countrywide Financial Corp. unit engaged in a widespread pattern of discrimination against more than 200,000 qualified African-American and Hispanic borrowers.
According to the settlement, Countrywide charged African-American and Hispanic borrowers higher fees and interest rates than non-Hispanic white borrowers with a similar credit profile. The complaint says that these borrowers were charged higher fees and rates because of their race or national origin rather than any other objective criteria.
“These institutions should make judgements based on applicants’ creditworthiness,” Attorney General Eric Holder said, “not on the color of their skin.”
Charlotte, N.C.-based Bank of America bought the nation’s largest subprime lender, Countrywide in 2008. The settlement will be used to compensate victims of Countrywide’s discriminatory mortgage loans from 2004 through 2007.
Jennifer Lopez, a spokeswoman for Nevada Attorney General Catherine Cortez Masto, said Wednesday that the federal settlement would not affect Nevada’s litigation against Bank of America and Countrywide.
“We will continue to go forward on the merits of our filed complaint,” Lopez said in an email.
As of Wednesday, it wasn’t clear how many Nevada homeowners would receive compensation from the Justice Department’s settlement with Bank of America.
Dan Frahm, a Bank of America spokesman, said in a statement that the bank does not practice lending based on race.
“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,” Frahm said.