Justice Dept Taking Longer than Expected in Paying-Out BofA (BAC) Settlement
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About that money you're supposed to get...
According to news out Monday, a settlement between the U.S. Department of Justice and Bank of America's (NYSE: BAC) Countrywide unit is being held up a bit. Though the Justice Department has been working diligently on getting a $335 million settlement with BofA over allegations of discrimination on lending, the time frame on getting money back to borrowers will take longer than expected.
Notifications to 223,000 borrowers were sent out in November, about five-months longer than expected. In addition, about 10 percent of those letters have come back, marked as undeliverable.
The DoJ originally hoped to get money back into the hands of borrowers within two years; following the recent delay, those hopes have diminished.
BofA's settlement covers Countrywide lending practices from 2004 to 2008, when the firm was accused of charging higher fees to black and Hispanic borrowers, or pushing them into higher-cost subprime loans. BofA acquired Countrywide in 2008. Payments may range from $200 to $15,000 per borrower, according to the settlement agreement. The higher payouts will go to about 12,475 Countrywide borrowers who entered subprime loans.
Shares of BofA are lower at the start Monday.
According to news out Monday, a settlement between the U.S. Department of Justice and Bank of America's (NYSE: BAC) Countrywide unit is being held up a bit. Though the Justice Department has been working diligently on getting a $335 million settlement with BofA over allegations of discrimination on lending, the time frame on getting money back to borrowers will take longer than expected.
Notifications to 223,000 borrowers were sent out in November, about five-months longer than expected. In addition, about 10 percent of those letters have come back, marked as undeliverable.
The DoJ originally hoped to get money back into the hands of borrowers within two years; following the recent delay, those hopes have diminished.
BofA's settlement covers Countrywide lending practices from 2004 to 2008, when the firm was accused of charging higher fees to black and Hispanic borrowers, or pushing them into higher-cost subprime loans. BofA acquired Countrywide in 2008. Payments may range from $200 to $15,000 per borrower, according to the settlement agreement. The higher payouts will go to about 12,475 Countrywide borrowers who entered subprime loans.
Shares of BofA are lower at the start Monday.
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