Does Countrywide now Bank of America owe you money? -The Justice Department is confronted with a challenging task of locating over 200,000 alleged victims and establishing a method of compensation after a $335million dollar fair lending settlment with Bank of America's Countrywide unit. The agreement was reached in December 2011.
Those victims suspected of being the most difficult to locate are the minority borrowers who suffered the most from the discrimination alleged to have occurred as a result of the lending practices of Countrywide.
This is because these victims are among those most likely to have experienced home foreclosure, forcing them to relocate not once but possibly numerous times. One civil rights group spokesman said it would be extremely difficult to locate all of these families.
The importance of this case is signified because it is the first by the Justice Department accusing a lender of erroneously directing mortgage borrowers to more expensive mortgages. The difficulty lies not only in locating all those borrowers affected, but also how to establish fair monetary amounts for compensation of the victims.
How can the Justice Department equitably establish a compensation amount for a family uprooted from their home while at the same time being prompted into agreeing to a more expensive subprime mortgage loan?
Borrowers could receive compensation ranging from several hundred dollars to several thousand with the most going to victims of subprime loans.The agreement that was announced in December 2011 made history as the largest residential fari lending settlement, addressing allegations that Countrywide and subsidiaries participated in a far-reaching pattern of discriminatory lending practices spanning from 2004 to 2008, aimed primarily at Hispanic and black borrowers.
Borrowers were allegedly charged higher costs, lendere fees, and prompted into high rate submprime loans, even when they were qualified candidats for prime mortgage loans, which are only offered to those with acceptable credit histories.
According to Bank of America, it reached the settlement in an effort to address the issues caused by Countrywide's alleged lending practices, which they report took place before they acquired the lending company back in 2008.
Bank of America also stated it had dropped the offering of Countrywide's questionanable products and discontinued the lending practices that did not meet BOA's commitment to equal and fair treatment of its customers.
One possible link in finding the victims may be with the Federal Trade Commission, who also had a Countrywide settlement in 2010, as the Justice Department begins the daunting task of tracking down the affected victims. Refund checks to affected borrowers in this settlement began to be mailed in the summer of 2011. However, a year and a half after the settlement, 1/4 of the settlement money still remains with the FTC because some victims have not yet been found and others fear cashing the check thinking it's a scam. Unclaimed funds will be donated to charities.