Mortgage Firm, a Florida-based mortgage lender, has agreed to invest $1.5 million to resolve a redlining lawsuit with the U.S. Department of Justice (DOJ), the parties announced Wednesday.
The Justice Department accused the company of discriminating against predominantly black and Hispanic neighborhoods in the Miami-Fort Lauderdale-West Palm Beach metropolitan area. The complaint filed in the Southern District of Florida alleges violations of the Fair Housing Act and the Equal Credit Opportunity Act.
A spokesperson for The Mortgage Firm told HousingWire, “Throughout its 29-year history, the company has been committed to providing equal credit access to all communities within its lending footprint. The fact that there are no violations or violations of regulations speaks for itself.”
“Non-deposit financial institutions, including mortgage companies, account for a higher proportion of homebuyer loans than banks and credit unions,” Assistant Attorney General Kristen Clark of the Justice Department said in a statement. “With this trend comes an obligation to fully comply with federal law prohibiting redlining.”
From 2016 to 2021, the mortgage company “significantly underperformed” its peer lenders in filling home loan applications from Black and Hispanic neighborhoods in the Miami metropolitan area, according to the complaint.
During the same period, the company received 9,375 mortgage applications, 30.4% of which were from residents in majority-Black and majority-Hispanic areas. The share of other companies in the same industry was 59%. The complaint also notes that the company had offices in predominantly white neighborhoods.
As of Thursday, the mortgage company had 206 sponsored loan officers in 37 operating branches, according to the National Multistate Licensing System (NMLS).
The Department of Justice began the investigation following a referral from the Consumer Financial Protection Bureau (CFPB). The resulting consent order requires court approval.
The consent order requires the mortgage company to conduct assessments to identify the credit needs of minority communities in the Miami metropolitan area, provide $1.75 million in loan assistance programs, enhance fair lending training, and more. It is being
“The mortgage company does not agree with the allegations that its South Florida lending practices violate any laws or regulations and will pay a civil penalty under the settlement,” a company spokesperson said in a statement. There’s no need.”
“Many of the terms of the agreed settlement have already been set out in our firm. “This is based on the company’s desire to move forward from this disagreement related to its activities. The mortgage company looks forward to its continued investment in South Florida communities,” the spokesperson added.
Mortgage companies announce the 16th redlining settlement under the Department of Justice’s Anti-Redlining Initiative, with the department providing more than $153 million in relief to communities of color affected by lending discrimination. was secured.
