Bank of America is close to settling a Justice Department probe into whether its Countrywide Financial Corp. unit violated fair-lending practices, according to a report from Bloomberg.
The news organization, quoting “two people with knowledge of the discussions” said a deal could be announced as early as this week and will include money to compensate Countrywide customers.
B of A bought CFC – once a top ranked subprime and alt-A lender – in August 2008.
If a deal comes through the bank, which is still the nation's largest home servicer, would be the biggest financial firm to settle a case with the Justice Department's new fair-lending unit.
DOJ has extracted more than $30 million in compensation for loan discrimination cases, including settlements with American International Group, and Citizens Republic Bancorp.
The Obama administration has increased scrutiny of lenders to prevent redlining – excluding borrowers in low-income or minority neighborhoods – as well as pricing discrimination and steering customers to products based on race or national origin.
Before being acquired, Countrywide was one of the nation's largest home lenders to minorities, but the loans offered were heavily weighted toward nonprime.
