According to a recent decision involving mortgage lender Countrywide (now owned by Bank of America since 2008), over 200,000 African-American and Hispanic loan borrowers could receive between $500 to thousands of dollars in remuneration. A payment of $335 million is meant to settle charges of discrimination stemming from Florida’s housing boom. Bank of America will make payments to borrowers nationwide, and thousands of people in South Florida are expected to receive compensation. It is likely that the lender’s unfair practices against communities of color led to many needless foreclosures.
The U. S. Justice Department said the settlement is the largest in history involving fair-lending practices. The agreement came after a civil suit was filed, alleging that Countrywide charged minority borrowers inordinately higher interest rates and fees on mortgage loans. Bank of America has since stopped Countrywide mortgage lending.
It is estimated that minority borrowers who were charged higher fees could receive $500 to $1,500 each, and people who were persuaded to take out sub-prime loans could potentially receive thousands of dollars each. A government investigation revealed that African-Americans and Hispanics were over three times as likely to be granted high-cost subprime loans than were non-minority borrowers. The investigation was based on 2.5 million Countrywide loans.
Months ago, Bank of America already agreed to pay $20 million to settle a case in which Countrywide was alleged to have illegally foreclosed on roughly 160 members of the U.S. military without any orders from a court. Bank of America also paid out $108 million to settle allegations that Countrywide inordinately charged borrowers fees for loan services.
South Florida residents who have questions about their own mortgage troubles would do well to consult with a legal professional who is familiar with Florida real estate law. Options such as loan modification, short sale, deed in lieu of foreclosure, and foreclosure defense can help ensure that all of your rights are protected, as well as your assets.