Published December 22, 2011 00:00
Today, the Justice Department announced the largest residential fair housing settlement in the history of the department. Countrywide/BofA will pay $335M for exhibiting a "widespread pattern or practice of discrimination against qualified African-American and Hispanic borrowers in their mortgage lending from 2004 through 2008", according to the Justice Department's press release. The Department charges that borrowers of color were steered to higher cost, higher rate loans "because of their race or national origin, and not because of the borrowers’ creditworthiness or other objective criteria related to borrower risk". Nearly 1/3 of these borrowers are from California.
CRC has warned federal regulators about this type of behavior for years. A number of our publications have shown, and housing counselors and advocates have confirmed, that brokers and lenders have steered borrowers of color into more expensive and risky loans. This settlement is an important moment for fair lending enforcement. CRC is glad that banks are beginning to be held accountable for the damage that they caused in communities of color. However, the damage has already been done to the countless borrowers who have now lost their homes and hurt their credit because of such discriminatory behavior. We hope that this case serves as a precedent for banks and other investigations in the future. We hope that banks correct these injustices through compensation and treat all borrowers fairly.
To read more of the Justice Department's press release about the settlement, click here.