Bank of America facing charges of borrower discrimination

by Anna Sobrevinas11 Jan 2017

Bank of America and two of its employees are facing raps from the Department of Housing and Urban Development after allegedly discriminating against potential Hispanic mortgage borrowers in South Carolina.

The case, filed by HUD and its Office of Administrative Law Judges, is expected to go to federal court, where the bank could be ordered by a judge to pay damages and attorneys fees.

A complaint filed by the National Fair Housing Alliance provoked the case, according to Reuters. Concerns of discrimination were raised after the alliance made ‘tests’ in Charleston between February 2013 and January 2014 to determine how female Hispanics were treated by bank employees compared with female non-Hispanic potential borrowers.

Bank of America is refuting HUD’s complaint.

“We are committed to fair lending principles and are proud to be one of the country's largest mortgage lenders to Hispanic borrowers," said spokesman Terry Francisco.

The testing in Charleston found that Hispanic borrowers were given less desirable lending conditions versus non-Hispanic borrowers. The bank was also less efficient in partnering Hispanic borrowers with loan officers, according to the complaint.

For example, a Hispanic borrower had high monthly payments and high closing costs ,whereas a non-Hispanic borrower was given lower monthly payments and low closing costs — and was even made an offer by the bank to shoulder $2,000 of her closing costs.


Related stories:
Bank of America has nearly paid all $7 billion in consumer relief for toxic mortgages – report
CFPB announces 2017 fair lending priorities

COMMENTS

  • by Common Sense | 1/11/2017 11:19:04 AM

    I know it's a crazy thought but just maybe, maybe they didn't have the same credit profile?

  • by Joe Wehage / Foundation Mortgage | 1/11/2017 11:28:43 AM

    I find it hard to believe in today's automated approval process that looks at credit, income, debts and the propossed asset, how discrimination would enter the equation.

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