Fair Lending Settlement: Countrywide Financial Corporation Fined $335 Million for Discriminatory Practices

On December 21, 2011, the Department of Justice hosted a press conference to announce a settlement with Countrywide Financial Corporation, resolving allegations of discriminatory mortgage lending practices against over 200,000 qualified African-American and Hispanic borrowers from 2004 to 2008. The settlement provides $335 million in compensation to victims, who were charged higher rates for mortgage loans due to their race or national origin. The investigation uncovered a pattern of discrimination in 180 geographic markets across 41 states and the District of Columbia.

Key Takeaways:

• The settlement resolves allegations that Countrywide and its subsidiaries engaged in discriminatory mortgage lending practices against over 200,000 qualified African-American and Hispanic borrowers between 2004 and 2008.
• The settlement provides $335 million in compensation to victims of Countrywide's discrimination.
• The investigation found a pattern of discrimination in 180 geographic markets across 41 states and the District of Columbia.
• Widespread violations of the Fair Housing Act and the Equal Credit Opportunity Act were allegedly committed by Countrywide, resulting in African-American and Hispanic borrowers being charged higher rates for mortgage loans due to their race or national origin.
• The settlement will specifically compensate more than 10,000 African-American or Hispanic borrowers who were steered into subprime loans despite being qualified for prime loans.
• This settlement is a significant step towards addressing discriminatory practices in the mortgage industry and promoting fair lending practices.

Statistics:

• Over 200,000 qualified African-American and Hispanic borrowers were affected by Countrywide's discriminatory practices between 2004 and 2008.
• The settlement provides $335 million in compensation to victims of Countrywide's discrimination.
• Countrywide originated over 4 million residential mortgage loans between 2004 and 2008.
• The investigation found discriminatory practices in 180 geographic markets across 41 states and the District of Columbia.
• More than 10,000 African-American or Hispanic borrowers were steered into subprime loans despite being qualified for prime loans.

Sources:

• Federal News Service, Inc. (2011) Transcript of Department of Justice Press Conference on Fair Lending Settlement.