Bank of America Corp. has agreed to pay $335 million to settle civil charges that its Countrywide Financial Corp. unit discriminated against minority homebuyers, charging them higher fees or placing them into subprime loans, the U.S. Department of Justice said today.
The settlement, to resolve allegations that the mortgage lender and its subsidiaries engaged in widespread discrimination against qualified African-American and Hispanic borrowers from 2004 through 2008, was the largest residential fair lending settlement in history, the department said in a news release.
Charlotte-based Bank of America, which continues to struggle with mortgage woes related to its 2008 Countrywide acquisition, said it settled the case to resolve issues that occurred before the bank bought the company.
"Bank of America's practices are not at issue," bank spokesman Dan Frahm said. "We are committed to fair and equal treatment of all our customers, and will continue to focus on doing what's right for our customers, clients and communities. 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."
The settlement provides $335 million in compensation for victims of Countrywide's discrimination during a period when the lender originated millions of home loans, the Justice Department said. The agreement, which is subject to court approval, was filed this afternoon in federal court in California.
"The department's action against Countrywide makes clear that we will not hesitate to hold financial institutions accountable, including one of the nation's largest, for lending discrimination," Attorney General Eric Holder said in a statement. "These institutions should make judgments based on applicants' creditworthiness, not on the color of their skin."
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