The US Department of Justice (DOJ) announced The Mortgage Firm Inc. agreed to a settlement that resolves allegations that it redlined predominantly Black and Hispanic neighborhoods in the Miam metro area.
Headquartered in Altamonte Springs, Florida, The Mortgage Firm was accused by the DOJ of violating the Fair Housing Act and Equal Credit Opportunity Act by allegedly failing to provide equal access to mortgage lending services to majority- and high-Black and Hispanic neighborhoods and discouraging people seeking credit in those communities from obtaining home loans. The DOJ noted The Mortgage Firm located its offices in predominantly white neighborhoods and generated mortgage loan applications in predominantly Black and Hispanic neighborhoods at rates lower than its peer institutions.
The proposed consent order, which awaits court approval, would require The Mortgage Firm to conduct a Community Credit Needs Assessment to identify the credit needs of residents of predominantly Black and Hispanic neighborhoods in the Miami metro area and to consider the results of that assessment to develop future loan programs, marketing campaigns and outreach efforts. It will also provide $1.75 million for a loan subsidy program to offer affordable home purchase, refinance and home improvement loans in predominantly Black and Hispanic neighborhoods in question.
Furthermore, the company is expected to enhance its fair lending training and staffing to ensure equal access to credit is provided across The Mortgage Firm’s market area, including by maintaining a Director of Community Lending. It will also expand its outreach and advertising efforts by maintaining an office location in a majority-Black and Hispanic neighborhood in Miami-Dade County, translating its website into Spanish and requiring all of its loan officers in the Miami metro area to engage in marketing to majority-Black and Hispanic neighborhoods.
“Non-depository institutions, including mortgage companies, are now originating a higher share of loans to homebuyers than banks and credit unions,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, adding, “This settlement will provide impacted communities in Miami with expanded access to homeownership, and makes clear that no matter the type of financial institution — bank, credit union or mortgage company — the department is committed to rooting out redlining across the country.”
