In the largest settlement ever involving discriminatory housing practices, Bank of America has agreed to pay victims of the subprime mortgage crisis a total of $335 million. This sum is in compensation for actions by their Countrywide Unit, which openly targeted and mis-evaluated black and Hispanic customers.
From The Huffington Post:
By steering borrowers into subprime loans from 2004 to 2007, the complaint alleges, Countrywide harmed those qualified African-American and Hispanic borrowers. Subprime loans generally carried costlier terms, such as prepayment penalties and significantly higher adjustable interest rates that increased suddenly after two or three years, making the payments unaffordable and leaving the borrowers at a much higher risk of foreclosure.
Not only did these practices hurt individual borrowers, but they also contributed heavily to the housing crisis and resulting recession while cultivating a discriminatory and predatory lending climate across the entire industry. Attorney General Eric Holder had this to say:
“These institutions should make judgments based on applicants’ creditworthiness, not on the color of their skin. With today’s settlement, the federal government will ensure that the more than 200,000 African-American and Hispanic borrowers who were discriminated against by Countrywide will be entitled to compensation.”
200,000 people is a huge number, are you one of these victims or do you know someone who is? How has the housing crisis affected you?