Bank of America will pay $300K to settle DOJ mortgage lending discrimination claim

Bank did not admit fault but as part of settlement will pay $4K to 75 eligible loan applicants “affected by the bank’s prior discriminatory policies,” government said

National /
Jul.July 23, 2020 06:30 PM
Acting US Attorney for Eastern District of New York Seth DuCharme and Bank of America CEO Brian Moynihan (Getty, Twitter, iStock)

Acting US Attorney for Eastern District of New York Seth DuCharme and Bank of America CEO Brian Moynihan (Getty, Twitter, iStock)

Bank of America and the U.S. Department of Justice reached a settlement over allegations the bank denied mortgages and home equity loans to adults with disabilities who were under legal guardianship.

The bank’s alleged actions relating to mortgages ran from 2010 to 2016, and violated the Fair Housing Act, according to the Justice Department. The government also said the bank’s practice regarding home equity loans lasted until 2017.

Under the terms of Thursday’s settlement, Bank of America did not admit fault but will pay $4,000 to about 75 eligible loan applicants who “were affected by the bank’s prior discriminatory policies,” according to a DOJ news release. The total payment will amount to around $300,000, the government said. The settlement still must be approved by a judge.

The Justice Department notified Bank of America as far back as 2016 that it was looking into its mortgage lending practices as possible violations of the Fair Housing Act.

The civil complaint filed in federal court in New York alleged Bank of America denied loans even “where the applicants provided court orders that specifically granted the guardian or conservator the legal authority to the mortgaged property.”

Seth D. DuCharme, acting U.S. Attorney for the Eastern District of New York, said the settlement “ensures that Bank of America will no longer discriminate against people with disabilities when issuing mortgage and home equity loans, and compensates the victims for their losses.”

According to the settlement, Bank of America said it “did not unlawfully discriminate against any person based on a disability,” but has since changed its guidelines. The bank said it entered into the settlement “solely for the purpose of avoiding costly litigation with the United States.”

As part of the settlement, Bank of America agreed to maintain its new loan processing and underwriting guidelines and continue training its employees about those guidelines.

The settlement comes less than two weeks after a news report showed that a separate federal investigation into discriminatory lending at Bank of America in Philadelphia stalled in late 2018, after complaints from the bank. The report, from ProPublica and The Capitol Forum revealed that the scuttled Bank of America inquiry was “part of a larger, previously unreported pattern in which the Trump administration has pulled back on civil rights enforcement as a part of its overall relaxation of bank oversight.”


Related Articles

arrow_forward_ios
Mortgage applications reach pandemic peak

Mortgage applications reach pandemic peak

Mortgage applications reach pandemic peak
One New York Plaza, One Madison Avenue and 605 Third Avenue top the list of largest real estate loans. (Brookfield, Wikimedia Commons, Fisher Brothers)

These were the largest Manhattan real estate loans in December

These were the largest Manhattan real estate loans in December
(Getty)

Mortgage applications fall during holidays even as rates sink

Mortgage applications fall during holidays even as rates sink
(iStock)

China limits property loans to curb housing bubble

China limits property loans to curb housing bubble
Beny Steinmetz (Getty)

Beny Steinmetz sentenced to five years in bribery scandal

Beny Steinmetz sentenced to five years in bribery scandal
Home purchase applications are down due to high prices.

Mortgage applications fall as home prices soar

Mortgage applications fall as home prices soar
From left: Ben Ashkenazy, 1991 Broadway, 2067 Broadway and Samuel Gindi (Getty; Google Maps)

Ben Ashkenazy threatened to “go nuclear” on Century 21 family: lawsuit

Ben Ashkenazy threatened to “go nuclear” on Century 21 family: lawsuit
The Mortgage Bankers Association reported an increase in applications for home loans during the second week of December 2020. (iStock)

Mortgage applications rise as rates reach another record low

Mortgage applications rise as rates reach another record low
arrow_forward_ios

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

Loading...