BofA to pay $335 million to settle Countrywide mortgage bias probe
Bank of America Corp. has agreed to pay $335 million to settle allegations that Countrywide Financial, which it now owns, systematically discriminated against minority home-buyers at the peak of the U.S. housing boom.
The Justice Department and the Illinois attorney general had alleged that Countrywide charged higher interest rates and other housing-related fees to African American and Latino home buyers than to white applicants with comparable income levels and credit scores.
The company frequently pushed minorities into risky subprime loans rather than into safer prime loans. The collapse of the subprime market beginning in 2007 sparked the U.S. mortgage bust and the brutal recession whose lingering effects continue to reverberate nationwide.
The $335 million will be distributed to alleged Countrywide victims. An independent monitor will be appointed to contact potential recipients and distribute the proceeds to them. People who think they may qualify for compensation can seek information by emailing email@example.com.
A Bank of America spokesman would not discuss specifics of the settlement but said the alleged wrongdoing occurred before the giant bank bought Calabasas-based Countrywide.