Many African-American and Hispanic homeowners in South Florida could benefit from a $335 million settlement that the U.S. Department of Justice reached with Countrywide Financial Corp.? over discriminatory lending practices during the housing boom.
Countywide, which is now owned by Bank of America? , was charged with steering African-American and Hispanic borrowers into subprime loans with higher interest rates when they could have qualified for regular mortgages, according to the DOJ. The practice occurred from 2004 through 2008 and involved more than 200,000 borrowers. During that time, Countrywide gave a disproportionately high amount of subprime loans to African-Americans and Hispanics, as compared to other groups, according to the DOJ.
?The complaint alleges that these borrowers were charged higher fees and interest rates because of their race or national origin and not because of the borrowers? creditworthiness or other objective criteria related to borrower risk,? the DOJ said in its news release.
The $335 million settlement will provide compensation for the victims.
There could be many in South Florida. Using Compliance Technology?s database to examine Home Mortgage Disclosure Act filings, Countrywide made 12,447 mortgages with high interest spread ? otherwise known as subprime ? in South Florida in 2006. That was the peak year for subprime lending.
Looking at those local Countrywide customers, high-rate loan ...
Many African-American and Hispanic homeowners in South Florida could benefit from a $335 million settlement that the U.S. Department of Justice reached with Countrywide Financial Corp.? over discriminatory lending practices during the housing boom.
Countywide, which is now owned by Bank of America? , was charged with steering African-American and Hispanic borrowers into subprime loans with higher interest rates when they could have qualified for regular mortgages, according to the DOJ. The practice occurred from 2004 through 2008 and involved more than 200,000 borrowers. During that time, Countrywide gave a disproportionately high amount of subprime loans to African-Americans and Hispanics, as compared to other groups, according to the DOJ.
?The complaint alleges that these borrowers were charged higher fees and interest rates because of their race or national origin and not because of the borrowers? creditworthiness or other objective criteria related to borrower risk,? the DOJ said in its news release.
The $335 million settlement will provide compensation for the victims.
There could be many in South Florida. Using Compliance Technology?s database to examine Home Mortgage Disclosure Act filings, Countrywide made 12,447 mortgages with high interest spread ? otherwise known as subprime ? in South Florida in 2006. That was the peak year for subprime lending.
Looking at those local Countrywide customers, high-rate loans went to 49 percent of black borrowers, 44 percent of Hispanic borrowers and only 25 percent of non-Hispanic, white borrowers.
High-spread subprime loans have the greatest default rate for borrowers. That means the minority populations that were given those types of loans when, as the DOJ alleges, they should have qualified for regular loans, have suffered a higher rate of foreclosure as a result.
About 8,800 minorities in South Florida who took out high interest spread loans from Countrywide in 2006 could be eligible under the settlement ? and that?s only one of the five years included in agreement. Borrowers who believe they are eligible for compensation should email the DOJ at countrywide.settlement@usdoj.gov.
Source: http://feedproxy.google.com/~r/vertical_61/~3/MwA20YmWCNk/south-florida-blacks-hispanics-could.html
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