Bank of America in Settlement Over Countrywide Loans

Posted December 21st, 2011 at 6:35 pm (UTC-5)
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The U.S. Justice Department says Bank of America has agreed to pay $335 million to resolve allegations that its Countrywide Financial unit discriminated against qualified African-American and Hispanic borrowers on home loans.

Officials say Countrywide charged over 200,000 African-American and Hispanic borrowers higher fees and interest rates than white borrowers with a similar credit profile. The alleged discrimination occurred between 2004 and 2008, before the bank purchased Countrywide. A Bank of America spokesman says the bank does not practice lending based on race.

U.S. Attorney General Eric Holder Wednesday said the settlement makes clear that the Justice Department will not hesitate to aggressively hold lenders, including the nation's largest, accountable for discrimination and financial misconduct. He also said these institutions should make judgments based on applicants' creditworthiness, not on the color of their skin.

Bank of America has lost billions of dollars, in part because of problems associated with the 2008 takeover of Countrywide Financial. Countrywide held a large number of mortgages that borrowers were unable to repay, badly hurting the lender. Bank of America has faced lawsuits connected with the mortgage business.