Countrywide Mortgage Lending Program Overhauled to Assist Minority Borrowers

New York Attorney General Eliot Spitzer said today that Countrywide Financial, one of the largest U.S. mortgage lenders, agreed to new measures that would combat discriminatory pricing for minority borrowers.

Under the agreement, Countrywide will compensate minority borrowers improperly steered toward higher-cost home loans and begin a $3 million consumer education program. A Spitzer spokeswoman said the actual amount of the compensation to be repaid won’t be known until a case by case review.

Countrywide agreed to fair lending training for loan officers and detailed reporting to the attorney general’s office to ensure compliance and to track Countrywide’s progress. The California-based lender also will pay the state $200,000 to cover investigation costs.

Spitzer’s office began investigating Countrywide after federal New York mortgage data from 2004 showed that black and Latino customers were more likely to receive higher priced “subprime” or “Alt-A” loans.