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In the largest fair lending settlement in history, today HUD Secretary Shaun Donovan joined Attorney General Eric Holder to announce a $355 million agreement with Countrywide Financial Corporation, a mortgage lender now owned by Bank of America.
The case against Countrywide alleges that between 2004 and 2008, the company practiced lending discrimination against more than 200,000 qualified African-American and Hispanic borrowers. These families were charged higher fees and interest rates than were white borrowers with similar qualifications. The government claims the company allowed its loan officers and mortgage brokers to vary interest rates and other fees based on a borrower’s race rather than on their credit qualifications. The complaint also alleges Countrywide steered African-American and Hispanic families towards risky, subprime mortgages while white borrowers with similar credit histories were offered safer, prime loans.
HUD Secretary Shaun Donovan said, “These families paid a very steep price for the irresponsibility and recklessness of those who sought to prey on them. Any way you look at it, that’s something this Administration refuses to accept.”
“The department’s action against Countrywide makes clear that we will not hesitate to hold financial institutions accountable, including some of the nation’s largest, for lending discrimination. These institutions should make judgments based on applicants’ creditworthiness, not on the color of their skin. With today’s settlement, the federal government will ensure that the more than 200,000 African-American and Hispanic borrowers who were discriminated against by Countrywide will be entitled to compensation,” added Attorney General Eric Holder.