BOA settles probe of disabled borrowers

BOA settles probe of disabled borrowers

Bank of America Corp (BOA) has agreed to settle US Department of Justice civil accusations that it violated federal laws by discriminating against mortgage applicants on the basis of disability. The accord resolves allegations the second-largest US bank, which made about $152 billion of first mortgages in 2011, imposed extra burdens on borrowers who relied on Social Security disability insurance income to qualify on home loans, including that they provide letters from doctors to document that income. Bank of America’s activity violated the Fair Housing Act and Equal Credit Opportunity Act, the Justice Department said. While the cost of the settlement is unclear, Bank of America agreed to pay $1,000, $2,500 or $5,000 to eligible mortgage loan applicants who were asked to provide doctors’ letters. It also agreed to hire an outsider to review 25,000 loan applications to identify other possible victims and to improve the training of underwriters and loan officers.

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