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?

 

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  • Alexandra

    I want to be surprised, but I’m not. There’s a lot more undercover discrimination going on. Which is why I rarely preach stats; one group is always at the end, while another at the top. That’s why debt may also be higher for minorities. I watched a documentary on foreclosure in Detroit and a lot of the people who lost their homes were Black and had ‘subrprime loans’.

  • MarloweOverShakespeare

    Nope. I’ve never trusted BOA and don’t plan on ever doing business with them in the future.

  • Sister

    I’m looking through my old loan papers now. Countrywide billed themselves as Americas homeland mtg co. But what they are not saying is that if you bought a new home; most of the time the new home builder wouldn’t let you finance the mtg outside of their preferred lender. That was a hint and a half that something was not right.

  • Kaydee-P

    Forgive me if I sound secretive lol. This is public information though- you’ll see more things like this article pop up in the new year.

    The government has ordered the big 13 banks to hire a team of independent researchers and auditors to go through their records from the housing bubble and prior with the aim of compensating people wrongfully harmed, to the extent of putting them back in their home or a monetary settlement. It seems shady because the conditions of the order do not allow the bank any contact with the customers to eliminate any possibility of bias. If you know someone who has lost their home, especially while serving in the military, or filed bankruptcy in the last several years through BoA, they must check this out.

  • Melvin Russell

    How do I find out whether or not I was a part of this suit? I was with Countrywide with an excessive rate during this period. They then sold the mortgage to Band of America after I sent in a $5000 payment and didn’t transfer the payment to BOA nor would acknowledge the payment even with proof?!!! BOA had modified us to an even higher mortgage and rate over a year ago and has refused (up until this point) to work with us even though we’ve made every effort and numerous attempts! Now they are threatening to foreclose even though we can afford the home with a normal modification! We have 4 kids and don’t want to be uprooted. HELP!!!!!!

    Fed Up and don’t want to lose our home. BTW we purchased our home in 2006 in DE.