Bank of America and two of its employees was charged this past week by the U.S. Department of Housing and Urban Development (HUD) with violating the Fair Housing Act by discriminating against prospective Hispanic mortgage borrowers in Charleston, South Carolina.

Title VIII of the Civil Rights Act of 1968 (Fair Housing Act), as amended, prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents or legal custodians, pregnant women, and people securing custody of children under the age of 18), and disability.

According to HUD, the National Fair Housing Alliance (NFHA) filed a complaint with HUD claiming against the nation’s second largest bank for discriminating against prospective borrowers who are Hispanic by failing to provide them with information about mortgage products or by offering them loans with less attractive terms, as compared to prospective borrowers who are not Hispanic.

NFHA conducted a series of tests comparing the treatment of Hispanic and non-Hispanic testers who posed as prospective borrowers at a Bank of America branch in Charleston, South Carolina. The investigation had shown that the bank discriminated against borrowers because of national origin by treating the Hispanic testers less favorably than the non-Hispanic testers.

For example, one non-Hispanic borrower received a much lower estimate on closing costs and monthly payments, as well as $2,000 in closing costs to be paid by BofA for the borrower.

HUD’s case against Bank of America will be heard in federal court, where a judge could potentially order the bank to pay punitive damages, order injunctive or other equitable relief to deter further discrimination, and order that defendants pay NFHA’s attorney fees.

“Today’s charge reflects our nation’s promise of fair housing and equal access to credit for qualified families, regardless of their national origin,” said Gustavo Velasquez, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity. “HUD will continue working to ensure that lenders fulfill their obligation under the law to treat all applicants equally.”

Moe Bedard
My name is Maurice "Moe" Bedard. I am the founder of America's #1 Mortgage Forum, LoanSafe.org. My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications.