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Post Info TOPIC: Bank of America Settles Borrower Discrimination Charges for $335 Million


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Date: Jan 26 06:25:24 2012
Bank of America Settles Borrower Discrimination Charges for $335 Million

Bank of America agreed to pay $335 million to settle accusations of discriminating against African American and Latino borrowers at its Countrywide Financial subsidiary, which the bank acquired in 2008.  The settlement was announced by a spokesman for the Justice Department, which brought the charges.  According to a statement from US Attorney General Eric Holder, a federal investigation found that at least 200,000 minority borrowers were discriminated against between 2004 and 2008, by steering those who qualified for prime loans into subprime offerings with higher interest rates.

According to Justice Dept. Officials, the majority of these borrowers did not even realize they had been diverted into costlier loans, and were simply elated to have gotten a loan and were realizing the dream of homeownership.  Many analysts say that this discriminatory lending practice was a chief cause of the subprime mortgage meltdown and ensuing housing crisis, when the more expensive loans began failing.

According to sources close to the probe, the practice was prevalent across the country, with about 30 percent of the identified cases happening in California and about two-thirds of the victims being of Latin American origin.  Bank of America reportedly put an end to Countrywide's questionable practices when it bought it in 2008, and was even praised for its efforts by the National Council of La Raza, a leading Latino civil rights group.

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