An important part of our federal Fair Housing Act (FHA) is fair lending. Our friends in the Department of Justice (DOJ) continue to investigate and bring cases alleging lending discrimination. Indeed, just this week the DOJ announced that a large independent home mortgage firm that concentrates on the New York, New Jersey, and Florida markets, agreed to pay $3.555 million to conclude a fair lending lawsuit DOJ filed in U.S. District Court for the Southern District of New York.
The allegations were that between 2005 and 2009 the lender engaged in a pattern or practice of discrimination by pricing residential mortgage loans for qualified African-American and Hispanic borrowers higher than for similarly-qualified non-Hispanic white borrowers.
The settlement provides $3.5 million in compensation to approximately 600 African-American and Hispanic borrowers identified by DOJ as paying more for a loan based on their race or national origin, and mandated that the defendant pay the maximum $55,000 civil penalty allowed by the FHA. The settlement also required the defendants to develop and implement new policies that limit the pricing discretion of its loan officers, require documentation of loan pricing decisions, and monitor loan prices for race and national origin disparities not justified by objective borrower credit characteristics or loan features.
This case continues to demonstrate that DOJ is actively enforcing the FHA. Management must ensure we know the law and follow the law. Or you may very well end up needing a lawyer like me.
Just A Thought.