Industry News

Countrywide reaches fair-lending agreement with N.Y. attorney general

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Countrywide Home Loans Inc. will compensate minority borrowers who were allegedly given high-cost loans and implement a $3 million consumer education program as part of an agreement with the New York attorney general's office. Attorney General Eliot Spitzer launched inquiries into the lending practices of several banks last year, citing data lenders provide to federal regulators as evidence that black and Latino customers were more likely to receive higher-cost loans. Data collected from lenders under the federal Home Mortgage Disclosure Act shows minorities are more likely to receive higher-cost loans than whites. But the HMDA data doesn't include factors used by lenders to underwrite and price loans, including loan-to-value ratios, debt-to-income ratios, and credit history scores. That makes it difficult to determine whether minorities are more likely to get higher-cost loans because of discrimination or because they represent greater risk to lenders, federal regulators who anal...