According to Attorney General Eric Holder, the record settlement was “the largest fair-lending settlement in the history of our nation.”
The Justice Department had alleged that the Bank’s Countrywide Financial mortgage unit engaged in a pattern of discriminatory lending practices in which more than 200,000 qualified minority borrowers from 2004 through 2008.
The discriminatory acts allegedly include charging applicants higher interest rates solely because of their race, and steering applicants who qualified for prime loans into subprime loans.
Countrywide specialised in subprime mortgages – mortgages often approved without proper checks on the credit worthiness of borrowers.
The fine of $335m will be used to compensate the victims of the alleged discrimination.
“The victims had no idea they were being victimized. They were thrilled to have gotten a loan and realize the American dream,” Thomas Perez, head of the Justice Department’s civil rights division, told reporters.
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