Countrywide sued for racial bias in mortgage loans
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By Jonathan StempelNEW YORK (Reuters) - Four black homeowners sued Countrywide Financial Corp. on Thursday, accusing the largest U.S. mortgage lender of racial discrimination in its lending practices.The Massachusetts homeowners accused Countrywide and several affiliates of marking up interest rates or tacking on fees after agreeing to lend based on objective criteria such as credit histories or the values of homes.Such actions, the plaintiffs alleged, have in practice subjected black applicants to "a significantly higher likelihood of exposure to discretionary points, fees and interest mark-ups." This violates the federal Fair Housing Act and Equal Credit Opportunity Act, according to the complaint.The lawsuit is the second in as many days to accuse Calabasas, California-based Countrywide of bias often known as "predatory lending."On Wednesday, the National Association for the Advancement of Colored People accused Countrywide and 13 other lenders of steering blacks into higher-cost loans than white borrowers.Both lawsuits seek class-action status. Thursday's lawsuit was filed with the U.S. District Court in Massachusetts, while the NAACP sued in the federal court in Los Angeles.Countrywide makes roughly one in six U.S. home loans. The company and lawyers for the Massachusetts plaintiffs did not immediately return calls seeking comment.Predatory lending is often used to describe charging high rates or fees to borrowers who may not be able to afford them.The Massachusetts plaintiffs want Countrywide to halt any racially discriminatory lending practices, reimburse unfair charges and pay punitive damages, among other remedies.Countrywide shares closed up 51 cents at $36.68 on the New York Stock Exchange on Thursday. They have fallen 13 percent this year.(Additional reporting by Christian Plumb and Walden Siew)
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