New York Atty. Gen. Eliot Spitzer said Tuesday that Countrywide Financial Corp. would adopt new measures to prevent discriminatory pricing for minority borrowers.
Under the agreement, Countrywide will compensate minority borrowers improperly steered toward higher-cost loans and begin a $3-million consumer education program. A Spitzer spokeswoman said the amount of the compensation to be repaid would not be known until the attorney general's office conducted a case-by-case review.
Calabasas-based Countrywide also agreed to improve training for loan officers and provide detailed reporting to Spitzer's office to ensure compliance. The lender also will pay New York state $200,000 to cover the cost of the probe.
Countrywide shares rose $1.19 to $41.17.
Rick Wentz, Countrywide's senior managing director, said the agreement "expands on the fair lending controls and monitoring policies that Countrywide has long had in place."
Spitzer's office began investigating Countrywide after federal mortgage data from 2004 showed that black and Latino customers in New York were more likely than white customers to receive higher-priced "sub-prime" loans.
Last year, the attorney general's civil rights bureau sent inquiries to lenders whose data revealed that blacks and Latinos tended to receive high-cost loans.
Spitzer noted that Countrywide responded to its request, but HSBC Holdings, JPMorgan Chase & Co. and Wells Fargo & Co. refused. These banks, joined by the U.S. Comptroller of the Currency, sued to block Spitzer's investigation, saying state officials do not have jurisdiction over federally chartered banks.