Mortgage giant faces Hub discrimination suit

Three minority borrowers claim in a discrimination lawsuit filed against the nation’s largest home lender that the company charged them more for subprime mortgages than it charged white borrowers in similar financial circumstances.

The suit, filed against Countrywide Home Loans Inc. in federal court in Boston, claims the company violated federal housing discrimination laws by charging black homeowners in Boston higher fees to agents that generate Countrywide’s new customers.

The Calabasas, Calif., company uses an “unchecked, subjective surcharge” that adds to the total costs of loans for its customers, and black borrowers paid more than whites, the suit claims.

The suit seeks class action status and more than $100 million to reimburse black customers of Countrywide and its subprime subsidiary, Full Spectrum Lending Inc.

Gary Klein, the attorney for the plaintiffs, told The Boston Globe that Countrywide has a system of discretionary fees that loan generators are allowed to charge customers and that blacks typically end up paying more than whites.

Countrywide denied the suit’s claims.

“No other mortgage lender has done more to lower the barriers to homeownership among historically underserved communities than Countrywide, and we do not tolerate discrimination in any of our lending practices,” the company said in a statement.

Plaintiff Gillian Miller bought a house in Boston’s Hyde Park neighborhood in January 2006 with two mortgages from Countrywide for $324,000, both with around 11 percent annual percentage rates.

She said she felt uncomfortable with Countrywide’s financing, including what the suit said was $9,423 in broker fees. The loan was arranged by Summit Mortgage and sold to Countrywide.

Miller said she is now having trouble making the monthly payment of more than $1,800.

Summit Mortgage chief executive Rick Fedele said Miller’s fees reflected the difficulty of getting her a mortgage, because she had no down payment and her mortgage did not require her to document income.

(Associated Press)