Mortgage Lender Agrees to Pay DOJ $1.75 Million to Settle Alleged Redlining Suit

Earlier this month, the DOJ announced it had reached a settlement agreement with a Florida-based mortgage lender over the DOJ’s accusations that the lender “significantly underperformed” its peer lenders in lending in both majority-Black and majority-Hispanic neighborhoods. 

According to the DOJ’s complaint filed in the Southern District of Florida detailing the alleged redlining, the offending conduct occurred from 2016 to 2021 in the Miami Metro area.  Specifically, of almost ten thousand applications received by the lender during this relevant time frame, only 30.4% of those applications were submitted by applicants living in either majority-Black or majority-Hispanic neighborhoods.  This number was significantly lower than comparable mortgage lenders whose applications from borrowers living in these neighborhoods accounted for 59% of their overall applications.  In addition to giving context to these figures, the DOJ’s complaint highlights the lender’s offices were located, “in predominantly white neighborhoods,” and the lender, “took inadequate steps to market to and develop referral networks within Black and Hispanic neighborhoods.” 

In addition to the $1.75 million fine to be paid to a loan subsidy program, the lender has agreed to the DOJ’s proposed consent order pending court approval.  Under the consent order the lender has agreed to expend outreach and advertising efforts, conduct a detailed assessment of its existing fair lending program, enhance its fair lending training an staffing, conduct a community credit needs assessment of predominantly Black and Hispanic neighborhoods in the Miami metro area and provide four outreach events and six financial education seminars, annually, to increase access for credit to these previously excluded neighborhoods.