Bank of America Fined $350 Million For Discriminatory Lending

Posted by admin on Dec 24, 2011 in Blog | 0 comments

December, 2011: The Justice Department announced a $335 million settlement with Bank of America over discriminatory lending practice at Countrywide Financial.

In a highly publicized case, Attorney General Eric Holder said a federal probe found discrimination against at least 200,000 qualified African American and Latino borrowers from 2004 to 2008, during the height of the housing market boom. He said that minority borrowers who qualified for prime loans were steered into higher-interest-rate subprime loans.

Thomas Perez, assistant attorney general for Justice’s civil rights division, said most of the victims of the discrimination were not aware that they were improperly steered to the riskier mortgages. He said the discriminatory practices went to the heart of the problem with subprime mortgages and the financial market meltdown they helped set in motion. These borrowers paid on average tens of thousands of dollars more in interest and were subject to pre-payment penalties.

Why did this happen? Greed, pure and simple. These loans that BofA were “pushing” gave the bank additional fees and interest charges that were over and above comparable market-rate loans.

NOW, here’s the kicker, my friends:

Bank of America issued a statement saying the discriminatory practices took place at Countrywide before it was purchased by Bank of America. ”Bank of America’s practices are not at issue,” said spokesman Dan Frahm. “We are committed to fair and equal treatment of all our customers. We discontinued Countrywide products and practices that were not in keeping with our commitment.”

So, although BofA disavows Countrywide’s lending practices, and is now telling us that Countrywide’s business practices were not in keeping with their commitment, they bought the company!!!! 

This should fool nobody. It further reinforces the fact that banks actively seek out ways they can scam homeowners out of their hard-earned money. In purchasing Countrywide, BofA simply wanted to acquire a company which had perfected a system designed to defraud borrowers, complete with personnel trained to steer unsuspecting borrowers to these high-profit loans.

Throughout the mortgage meltdown, banks that have been found to have defrauded borrowers have issued statements that go something like this: “we would never do such a thing, and if it did happen, it will never happen again”!

Readers, be warned. The banks are nobody’s friend. Redouble your efforts to get out of debt to any bank. And especially if you have a mortgage, learn how the Mortgage Magic System can save you years of un-necessary payments and hundreds of thousand of dollars of interest, and quite possibly, your retirement.