Federal officials on Wednesday announced a $355 million agreement with Countrywide Financial Corp, which was described as the largest fair-lending settlement in history.

The U.S. Department of Justice case against Countrywide – the Calabasas mortgage lender now owned by Bank of America – alleged that between 2004 and 2008 the company practiced lending discrimination against more than 200,000 qualified African-American and Hispanic borrowers.

The families were charged higher fees and interest rates than were white borrowers with similar qualifications, the Justice Department and U.S. Department of Housing and Urban Development alleged. Countrywide, which was a public company before BofA bought it in 2008, allowed loan officers and mortgage brokers to vary interest rates and other fees based on a borrower’s race rather than on their credit qualifications.

The federal complaint also alleges Countrywide steered African-American and Hispanic families toward risky, subprime mortgages while white borrowers with similar credit histories were offered safer, prime loans.

“These families paid a very steep price for the irresponsibility and recklessness of those who sought to prey on them,” said HUD Secretary Shaun Donovan in a statement. “Any way you look at it, that’s something this Administration refuses to accept.”

Attorney General Eric Holder said borrowers who were discriminated against by Countrywide will be entitled to compensation from the settlement fund.

A Bank of America spokesman said Countrywide’s offending practices were discontinued after the acquisition.