DOJ Settles Redlining Case with The Mortgage Firm for $1.5 Million

The Mortgage Firm Settles Redlining Case with DOJ for $1.5 Million

The Mortgage Firm, a Florida-based mortgage lender, has reached a settlement with the U.S. Department of Justice (DOJ) in a redlining case, agreeing to invest $1.5 million to resolve allegations of discrimination against predominantly Black and Hispanic neighborhoods in the Miami-Fort Lauderdale-West Palm Beach metropolitan area.

The DOJ filed a complaint in the Southern District of Florida, accusing The Mortgage Firm of violating the Fair Housing Act and Equal Credit Opportunity Act by significantly underperforming its peer lenders in generating mortgage applications from minority neighborhoods from 2016 through 2021. The company received 30.4% of its mortgage applications from residents of majority-Black and majority-Hispanic neighborhoods, compared to its peers’ 59%.

Kristen Clarke, the DOJ’s assistant attorney general, emphasized the importance of ensuring compliance with federal laws that prohibit redlining, especially as non-depository institutions like mortgage companies are originating a higher share of loans to homebuyers.

As part of the settlement, The Mortgage Firm is required to conduct an assessment of credit needs in minority communities, provide $1.75 million for a loan subsidy program, and enhance fair lending training. The company’s spokesperson stated that while they do not agree with the allegations, they chose to settle to avoid the cost of litigation and move forward.

This settlement marks the DOJ’s 16th redlining settlement under the Combating Redlining Initiative, with over $153 million secured in relief for communities impacted by lending discrimination. The Mortgage Firm looks forward to continuing its investment in South Florida communities despite the disagreement.