Bank of America's purchase of Countrywide in 2008 just got more expensive. BofA agreed today to pay $335 million to settle a Justice Department complaint that Countrywide discriminated against black and Hispanic home buyers. The Wall Street Journal calls it the "largest residential fair-lending settlement in history." The allegations said Countrywide charged more than 200,000 minority borrowers more than white borrowers with similar credit profiles between 2004 and 2008.
One way Countrywide lenders allegedly did so was by requiring minorities to take out more costly subprime loans even though they qualified for prime loans with better interest rates. All of this took place before BofA bought the bank. The settlement is a "very important step in state and federal efforts to hold mortgage lenders accountable for the devastation they have caused to American families and their finances," says Illinois Attorney General Lisa Madigan. The borrowers who got lousy deals will be able to get some of their money back, notes AP. (More Bank of America stories.)
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