How to find local ties to the Bank of America discrimination settlement
This is The Associated Press’ video about the $335 million settlement that Bank of America agreed to pay to settle discrimination claims.
Word on Wednesday that Bank of America would pay $335 million to settle discrimination claims against its Countrywide mortgage lending unit likely has some people in your audience wondering if they qualify for part of the payout.
Little information on would-be claimants is available. The U.S. Department of Justice, which agreed to the settlement, says it will notify awardees once an administrator for the case is selected. The Justice Department has identified about 200,000 African American and Hispanic borrowers who were charged higher mortgage-origination fees and/or steered into costlier subprime loans when they could have qualified for less expensive conventional mortgages. Here’s the full press release outlining the case and the charges against Countrywide, which Bank of America bought in 2008.
According to this Chicago Tribune report, those taking part in the settlement could receive amounts ranging from a few hundred dollars to more than $10,000 depending on the circumstances of their loan. Note that the Illinois attorney general provided an estimate of the number of affected citizens for this article. The AGs of many states were involved in the case and might be your best bet for additional information, case studies and examples until the Justice Department provides further information. Here’s a list of state attorneys general.
A couple of other nuggets from the Justice Department press release might lead to other angles:
- The settlement requires Countrywide to implement non-discrimination policies and practices when it again begins originating loans. It would be interesting to talk with executives at local and regional lenders, as well as at large national firms with a big presence in your area, about similar policies in their organizations. Do they have formal rules? What protections are in place for minority consumers, and what should would-be borrowers consider red flags in mortgage discussions with loan officers?
- A refresher on typical mortgage-origination fees – including appraisal fees, credit checks and other paperwork – would be a good clip-and-save feature for readers, along with a list of bogus or inflated fees sometimes tacked on by less scrupulous lenders.
- The press release also says “The settlement also resolves the department’s claim that Countrywide violated the Equal Credit Opportunity Act by discriminating on the basis of marital status against non-applicant spouses of borrowers by encouraging them to sign away their home-ownership rights.” A primer on the pros and cons of borrowing for and titling real estate jointly or separately might help married couples understand their options, especially if one has far worse credit than the other. Talk with real estate attorneys and advisers such as Certified Financial Planners.
For context, the Center for Responsible Lending rounds up a number of articles and studies on racial bias and predatory lending; you might also try your area universities’ business schools, law schools and public policy research centers for similar or regional studies.
This isn’t the first big-ticket settlement that Countrywide has cost Bank of America, by the way. As this Wall Street Journal article notes, the lender has incurred billions of dollars in settlement costs with Countrywide investors and consumers, including payments to some borrowers whose Countrywide loans were foreclosed upon. See this settlement-information site for more information. Those cases were due to be paid out earlier this year. It might be worth a check with your state’s attorney general to see if the process has been smooth.
