CHICAGO (CN) – The Illinois attorney general says Countrywide Home Loans discriminated against black and Latino borrowers, steering them into risky subprime loans more often than similarly situated white borrowers. “Countrywide effectively imposed a surcharge on mortgage loans based on race and ethnicity,” Attorney General Lisa Madigan said.
Madigan said that Countrywide’s actions cannot be explained by objective factors such as credit scores or debt-to-income ratios.
She said her office’s investigation included data from more than 83,000 Countrywide mortgages in Illinois between 2005 and 2007. She found that the odds of black and Latino borrowers getting higher-cost subprime loans were three times greater than those of white borrowers.
“It’s disturbingly clear that if you were an African-American or Latino borrower who walked into a Countrywide store, you likely paid more for your mortgage than a white borrower,” Madigan said in a statement.
Madigan wants Countrywide and its corporate parent Bank of America enjoined from continuing its discriminatory policies, damages for the victims, and a $25,000 fine for each violation of the Illinois Human Rights Act.
Countrywide was the nation’s and Illinois’ largest lender during the housing boom. Bank of America bought it in 2008.