The US Department of Justice and Bank of America Corp. (NYSE: BAC) have reached settlement related to discrimination allegations lodged against Countrywide Financial Corp. before Countrywide was acquired by BofA. The bank will pay a settlement of $335 million.
Between 2004 and 2008, Countrywide is alleged to have steered African-American and Hispanic borrowers into more costly sub-prime loans when the borrowers could have qualified for a prime mortgages. More than 200,000 borrowers were directed to the higher-priced loans.
This settlement also ends a separate discrimination lawsuit filed by the attorney general of Illinois against BofA. Lending discrimination lawsuits are expected to increase in 2012 as other states seek to punish lenders for violating discrimination laws.
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