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Bank of America settles discrimination lawsuit for $335m

2011-12-23

When Bank of America (BofA) acquired Countrywide Financial, it also acquired claims of alleged discrimination against Black and Hispanic homebuyers.  Over 200,000 Ifrican-American and Hispanic individuals filed a lawsuit with the Department of Justice (DOJ) alleging that Countrywide Financial charged them higher fees and interest in both its retail and wholesale lending.

The DOJ also alleged that Countrywide steered minorities into subprime loans while directing its Caucasian customers to prime loans.  The alleged discrimination took place from 2004 to 2007 during the real estate boom when Countrywide was racking up profits as the nation's largest subprime mortgage lender.  In 2008 the company nearly collapsed and was purchased by BofA in a $2 billion distress sale.