The parties have reached a final $1.2 million settlement in an action filed against Flagstar Bank, FSB, on behalf of white customers who alleged that the lender charged them higher fees than minorities in violation of federal and state lending laws. Parties who have not been notified of the settlement should contact the class attorneys as soon as possible.

After the court ruled that the Troy, Michigan-based, mortgage company charged minority customers up to 3 percent in loan officer commission fees while charging whites a maximum of 4 percent, the company decided to settle rather than see the litigation to a close. Flagstar has agreed to reimburse lawsuit participants the amount they were overcharged, ranging from $63 to more than $2,000 each and totaling $704,000 plus interest. The company also will pay each person $193 in non-economic damages, about $160,000 total.

Flagstar implemented the policy in May of 2001 and discontinued it in January 2002, according to court documents. The bank apparently started the policy because internal investigators thought minorities might have been charged more than whites, and the bank wanted to ensure that wasn't the case. To carry out the overcharges, the bank allegedly used U.S. Housing and Urban Development forms intended only for statistical purposes to determine a loan applicant's race.