LOS ANGELES—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, according to the
allegations. 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. A Bank of
America spokesman would not discuss specifics of the settlement but said
the alleged wrongdoing occurred before the giant bank bought
Countrywide.
“I want to make it very clear this pertains to
Countrywide activities prior to Bank of America’s acquisition,” said the
spokesman, Dan Frahm. “Bank of America practices were never in
question.”
Frahm also issued this statement on behalf of Bank of
America: “We reached this settlement to resolve issues about
Countrywide’s alleged historic practices that occurred before Bank of
America acquired the company. Bank of America’s practices are not at
issue.
“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.”
People who think they may qualify for compensation can seek information by emailing countrywide.settlement@usdoj.gov.
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