Mortgage CompanyFlorida-based mortgage lender, agreed to invest $1.5 million to settle restructuring lawsuit US Department of Justice (DOJ), the parties announced on Wednesday.
The DOJ accused the company of specifically discriminating against 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 said HousingWire that “throughout its 29-year history, the company is committed to providing equal access to credit to all communities under its lending threshold. The complete absence of legal or regulatory violations on the Mortgage Firm’s record speaks for itself.”
“Non-depository institutions, including mortgage companies, now originate a greater proportion of loans to home buyers than banks and credit unions,” said Kristen Clarke, DOJ assistant attorney general, in a statement. “With this practice comes the responsibility to ensure full compliance with our federal anti-reproduction laws.”
According to the complaint, The Mortgage Firm “underperformed” its peer lenders when applying for mortgages in predominantly Black and Hispanic neighborhoods in the Miami metropolitan area from 2016 to 2021.
The company received 9,375 home loan applications during that period, of which 30.4% were from majority-Black and majority-Hispanic residents. The peer share was 59%. The complaint also revealed that the company has its offices located in mostly white neighborhoods.
According to the National Multi-State Licensing Program (NMLS), The Mortgage Firm has 206 sponsored loan officers in 37 branches operating as of Thursday.
The DOJ began an investigation after receiving a referral from Consumer Financial Protection Bureau (CFPB). The effect of a consent order requires the approval of the court.
According to the consent order, The Mortgage Firm is required to conduct an assessment to identify the credit needs of minority communities in the Miami city area, provide $1.75 million in loan financing programs and improve its loan training, among other things.
A spokesperson for the company said “Mortgage Firm does not agree that its South Florida mortgage practices violate any laws or regulations, and the Company is not required to pay a civil penalty under this settlement.”
“Many of the agreed conditions already exist in the Company. The Mortgage Firm’s decision to settle this matter out of court is based on its desire to avoid the costs of litigation and continue this dispute related to business activities that occurred approximately five to ten years ago. The Mortgage Firm looks forward to continuing to invest in South Florida communities,” the spokesperson added.
The Mortgage Firm marks DOJ’s 16th restructuring under the Combating Redlining Initiative, where the department has provided more than $153 million in aid to communities of color affected by discriminatory lending.
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