Bank of America settles Countrywide discrimination lawsuit

Bank of America has agreed to pay $335 million to settle allegations that its Countrywide unit practiced discriminatory lending practices.

The U.S. Department of Justice alleges that Countrywide charged African-American and Hispanic borrowers higher fees and higher rates than white borrowers with similar credit histories. The DOJ alleges that borrowers were charged more because of their race or nationality and not objective credit criteria.

The settlement money will be used to compensate the victims of Countrywide’s discriminatory practices between 2004 and 2007.

Bank of America purchased Countrywide, the nation’s largest subprime lender, in 2008. David Frahm, Bank of America spokesman stated, “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,” according to the Huffington Post.

Many attribute the housing crisis to subprime loans, which carried pricier terms such as pre-payment penalties. The adjustable interest rates on subprime loans is significantly higher and often caused monthly mortgage rates to skyrocket after two or three years. The people holding subprime mortgages often couldn’t afford their monthly mortgage payments sending them onto foreclosure. For some, foreclosure attorneys were able to modify their mortgages, but many others lost their homes.

Foreclosure is a terrifying thing to face, but when you have a foreclosure lawyer working on your case some of your fears can be alleviated. A foreclosure attorney will use their knowledge and skills to keep you in your home.