DoJ reported settlement with The Mortgage Firm to resolve redlining claims in Miami.
Agreed to pay $1.75mn to resolve allegations that it engaged in a pattern/practice of lending discrimination by redlining predominantly Black and Hispanic neighborhoods.
Allegations
Failed to provide equal access to mortgage lending services to majority- and high-Black and Hispanic neighborhoods in the Miami metropolitan statistical area (MSA).
Redlining is illegal practice by which lenders avoid providing credit services to individuals living in communities of color because of the race, color or national origin.
Discouraged people seeking credit in those communities from obtaining home loans.
Firm located its offices in predominantly white neighborhoods and took inadequate steps to market to develop referral networks within Black and Hispanic neighborhoods.
The Mortgage Firm generated mortgage loan applications in predominantly Black and Hispanic neighborhoods in the Miami MSA at rates far below peer institutions.
Proposed consent order awaits court; proposes firm conduct a community credit needs assessment to identify credit needs of residents of Black and Hispanic neighborhoods.
Also, firm to pay $1.75mn for loan subsidy program to offer affordable home purchase.
Conduct detailed assessment of fair lending program in Miami MSA, enhance fair lending training and staffing to ensure equal access to credit, and expand its outreach.
Bolster connections and build referral sources in Black and Hispanic neighborhoods by providing 4 outreach events per year and 6 financial education seminars per year.
