U.S. housing regulator accuses Bank of America of bias in lending

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By Sarah N. Lynch | WASHINGTON

WASHINGTON The U.S. Department of Housing and
Urban Development (HUD) filed charges on Friday against Bank of
America and two of its employees, saying they wrongfully
discriminated against prospective Hispanic mortgage borrowers in
South Carolina.

HUD said it expects the case will be heard in federal court,
where a judge could potentially order the bank to pay damages,
attorneys fees or other relief. HUD filed the complaint in its
Office of Administrative Law Judges.

A Bank of America spokesman strongly rejected HUD’s claims.

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

The case against Bank of America was prompted by a complaint
filed by the National Fair Housing Alliance.

The alliance raised concerns about possible discrimination,
after it conducted a series of “tests” in February 2013 through
January 2014 to compare how bank employees treated female
Hispanic versus female non-Hispanic prospective borrowers in a
Charleston-based branch of the bank.

This is not the first time that Bank of America has faced
allegations of discrimination.

The Supreme Court is currently weighing whether to let Miami
pursue lawsuits accusing both Bank of America and Wells Fargo &
Co of engaging in predatory lending against black and
Hispanic home buyers. The city accused the banks of
steering those borrowers into higher-cost loans that they could
not afford.

In the testing by the National Fair Housing Alliance in
Charleston, South Carolina, the Hispanic borrowers were offered
less favorable lending terms compared with the non-Hispanic
borrowers and the bank was less prompt in helping connect the
Hispanic borrowers with the loan officer, the testing found.

For instance, one non-Hispanic borrower received an estimate
with lower closing costs and monthly payments, as well as an
offer by the bank to pay $2,000 of her closing costs.

The Hispanic borrower, in contrast, would have faced higher
monthly payments and did not receive a similar offer for the
bank to cover her closing costs.

The Fair Housing Act makes it illegal to deny or
discriminate against people based on race, color, national
origin, religion, sex, familial status or disability when it
comes to issuing mortgages or mortgage modifications.

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