In the largest residential fair-lending penalty ever, Countrywide Financial Corporation has agreed to pay $335M to settle claims brought by the Justice Department relating to alleged discriminatory practices in residential lending.
On December 21, 2011, Countrywide Financial Corporation entered into a Consent Order with the Justice Department resolving claims that Countrywide engaged in a pattern and practice of violation of the Equal Credit Opportunity Act and the Fair Housing Act. The Complaint alleged discrimination by Countrywide on the basis of race, national origin and marital status in the extension of residential credit and in the making of residential real-estate transactions.
The Justice Department's claims stem from a fair lending review of Countrywide's mortgage pricing practices beginning in 2006. As a result of that review, the Federal Reserve Board determined that it had reason to believe Countrywide had engaged in a pattern or practice of discrimination, and the matter was referred to the Department of Justice. The Office of Thrift Supervision then conducted an examination of Countrywide's operations, also concluding that it had reason to believe that Countrywide had displayed a pattern or practice of discriminating against minority loan applicants in the pricing of home loans and against married couples concerning the term and condition of home loans.
The Consent Order specifically acknowledges that the claims relate only to loans originated by Countrywide and not to any mortgage lending practices of Countrywide's successor, Bank of America.
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