BofA pays record $335M for Countrywide’s discriminatory lending

New York /
Dec.December 22, 2011 08:54 AM

The latest disastrous turn in Bank of America’s acquisition of Countrywide Financial has the nation’s second largest lender paying a record $335 million penalty for Countrywide charging more to lenders of certain races and origins.

The settlement is more than 10 times the total amount the U.S. Department of Justice has collected for all previous fair-lending settlements, according to Bloomberg News. Individual borrowers could collect more than $1,000 from the settlement, depending on the form of the loan.

Countrywide charged more than 200,000 black and Hispanic borrowers higher fees and interest rates and steered them towards pricey subprime mortgages from 2004 to 2007, according to the Justice Department. BofA distanced itself from Countrywide’s lending pattern, and said it discontinued Countrywide practices it disapproved after the 2008 acquisition.

“The bank is trying to dig its way out of a hole — there’s no bigger hole than its Countrywide assets,” said John Taylor, president of the National Community Reinvestment Coalition.

BofA has continued to be penalized for loans Countrywide, the largest U.S. provider of subprime mortgages, originated in the days leading up to the housing bust. Earlier this year, the bank agreed to pay investors $8.5 billion for bad mortgages stemming from Countrywide, and it could face separate Department of Housing and Urban Development fraud charges related to federally insured Countrywide mortgages. [Bloomberg]


Related Articles

arrow_forward_ios
From left: Top Agent Network CEO David Faudman, NAR president Kenny Parcell, and Attorney General Merrick Garland (Getty, Top Agent Network)
Justice Department wants say in pocket listings case against NAR
Justice Department wants say in pocket listings case against NAR
CW Realty's Cheskie Weisz and 187 Kent Avenue (CW Realty, The Kent House, Getty)
Kent House owners refi Williamsburg rental after dodging foreclosure
Kent House owners refi Williamsburg rental after dodging foreclosure
Ben Byrne and 1 Java Street (LinkedIn, LendLease)
Lendlease lands $360M construction loan for Greenpoint rental towers
Lendlease lands $360M construction loan for Greenpoint rental towers
From left: Attorney General Merrick Garland and RealPage CEO Dana Jones (Getty, The United States Department of Justice, RealPage)
Justice Department investigating RealPage
Justice Department investigating RealPage
 Lakeland Bank president Thomas Shara (Lakeland Bank, Illustration by The Real Deal with Getty)
In redlining case, New Jersey lender to pay $12M
In redlining case, New Jersey lender to pay $12M
A photo illustration of Bank of America CEO Brian Moynihan (Getty Images)
Bank of America piloting no-down payment mortgages
Bank of America piloting no-down payment mortgages
RXR Realty’s Scott Rechler and 75 Rockefeller Plaza (Illustration by Kevin Cifuentes for The Real Deal with Getty Images, dconvertini/CC BY-SA 2.0/via Wikimedia Commons)
RXR lands $260 million refi for 75 Rockefeller Plaza
RXR lands $260 million refi for 75 Rockefeller Plaza
Witkoff's Steve Witkoff and The Brook in Brooklyn (Witkoff, Illustration by The Real Deal with Getty)
Witkoff, Apollo get construction financing for DoBro rental tower
Witkoff, Apollo get construction financing for DoBro rental tower
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...