Bank of America agreed to pay $335 million to settle allegations that its Countrywide Financial unit discriminated against African-American and Hispanic borrowers during the housing peak, announced on Wednesday the Justice Department.
In its investigation, the Department found discrimination practices in more than 180 geographic markets across 41 states. These practices included violations of the Fair Housing Act and the Equal Credit Opportunity Act, and resulted in African-American and Hispanic borrowers being charged higher rates than their white counterparts.
For example, in 2007, Hispanic or African American customers in Los Angeles, borrowing $200,000 paid an average or $1200 more in fees than a similarly qualified white borrower.
This settlement will compensate the more than 200,000 African-American and Hispanic borrowers who were victims of discriminatory conduct, including more than 10,000 African-American or Hispanic borrowers who – despite the fact that they qualified for prime loans – were steered into subprime loans.
Bank of America defended its reputation stating that those mortgages were processed before Bank of America bought Countrywide.