Madison, Wisconsin-based Fairway Mortgage Corporation has agreed to a nearly $10 million settlement of redlining charges brought by the Department of Justice (DOJ) and the Consumer Financial Protection Bureau (CFPB), with the company claiming the probe into its lending and the timing of the settlement announcement were politically motivated.
In a press statement, Fairway noted that the CFPB began to investigate the company’s mortgage lending activities in Birmingham, Alabama, on “the first full day after the Biden Administration took office” and complained the news of the settlement was published “filed days before the impending Presidential election.” Fairway also asserted that despite a multi-year investigation, “the government agencies did not identify any evidence of redlining or other discrimination by Fairway. Rather, the government agencies relied on a quota analysis to allege that Fairway was not meeting the needs of residents of majority-Black census tracts, in contravention of the US Supreme Court’s 2023 decisions regarding affirmative action.”
The DOJ and CFPB alleged that Fairway concentrated all its retail loan offices in majority-white areas, directed less than 3% of its direct mail advertising to consumers in majority-Black areas, and for years discouraged homeownership in majority-Black areas by generating loan applications at a rate far below its peer institutions. The DOJ and CFPB claimed Fairway violated the Fair Housing Act, Equal Credit Opportunity Act, and Consumer Financial Protection Act.
The settlement requires Fairway to provide $7 million for a loan subsidy program to offer affordable home purchase, refinance, and home improvement loans in Birmingham’s majority-Black neighborhoods, invest an additional $1 million in programs to support that loan subsidy fund, and pay a $1.9 million civil penalty to the CFPB’s victims relief fund.
“This settlement, and the over $150 million in relief the Justice Department has secured for communities across the country through our Combating Redlining Initiative, will help to ensure that future generations of Americans inherit a legacy of home ownership that they too often have been denied,” said Attorney General Merrick B. Garland in a statement. “This case is a reminder that redlining is not a relic of the past, and the Justice Department will continue to work urgently to combat lending discrimination wherever it arises and to secure relief for the communities harmed by it.”
Fairway stated it was “disappointed” with the outcome of the investigation but denied the agencies’ charges of racial discrimination.
“Fairway vigorously defended itself against the government agencies’ allegations and continues to deny that the company engaged in any discriminatory behavior,” said Fairway in its press statement. “Fairway also maintains strong disagreement with the government agencies’ legal and statistical approach to identifying potential discrimination. However, to resolve the matter and curb the further expenditure of resources, Fairway determined that a settlement with the Bureau and the DOJ would be the most appropriate solution.”
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As a Realtor, I work with Fairway loan officers often and can say that in the Houston area, there is no redlining. Fairway works hard to help all people regardless of race, color, etc.
Another example of the CFPB and THE DOJ subsidizing their programs through false claims and accusations and knowing the lenders have to settle for resource reasons. Unlike the Gov’t wasting our taxpaying money constantly. T least Fairway mtg called them out on what it is really about Politically Motivated
I have worked with Fairway mortgage and never have seen any kind of red lining or discriminatory practices against buyers
I am a real estate agent in the Wichita, Kansas area, and have used Fairway for years, and they have never been discriminatory against anyone!
I too have worked with Fairway mortgage. They have been fantastic in helping me get loans for first time buyers. in no way have I ever seen any indication of red lining. I work primarily in East Tennessee.
68% of Birmingham Identifies as Black.
22% of Houston Identifies as Black.
That’s reason enough to investigate the discrepancy in loan processing and acceptance when the Statistics confirm the Algorithm … you can’t hide from the office location and advertising numbers.
This is yet another sign of a politically motivated DOJ attacking American industry to cripple the US economy. Just saying.
In all of Tennessee 13% of the state Identifies as Black, and only 3.4% Identifies as Black in Eastern TN.
Wichita has 9.7% Identify as Black.
As a Realtor of 40 years I’m impressed and happy to see the DOJ and CFPB investigating and protecting all Consumers.
The US Economy has never been Stronger … Especially under this Administration.
We are still paying the price for the previous Administration’s lack of focus and denial of a horrendous pandemic.
Inflation is a Direct Consequence of Corporate Greed and Tax Cuts to the Wealthy.
BOB: Have you read the just released “true US ECONOMIC Income & Output report from Brownstone.org indicating actual inflation for past two years is double of that reported by your favored Administration due to their ‘Playing the numbers’? A Good rude awakening – ‘Just Saying’!
Just Saying !!!
We must find a way to stop the False claims by a weaponized DOJ who uses taxpayer funds to make false claims that are unfounded like this. It’s time we take back our country and restore the rule of law. Its also time those who are the DOJ who present these false claims be brought to justice. If you have never worked with Fairway Mortgage then you should not comment on this story because you are only showing that you believe everything you are told by the media. I have worked to secure home loans with Fairway. We need to stop inventing crimes to get promotions and abuse of power. Its time to return to the rule of law. We cannot and must not allow the DOJ to invent these crimes when there isn’t any party named who was harmed. Its a baseless claim with no injured party except the very principle of rule of law which is taking a huge hit with false claims like this. Get out and vote this November for our Country. Be America’s hero and Let’s take it back from those who are trying to destroy it.