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DOJ reaches redlining settlement with mortgage lender accused of discriminating against communities of color

By Hannah Rabinowitz, CNN

A Pennsylvania mortgage company owned by billionaire investor Warren Buffett discriminated against communities of color in Pennsylvania, New Jersey and Delaware, the Justice Department said Wednesday, in what they say is the first redlining agreement that the department has secured with a mortgage company.

Under the terms of the agreement, Trident Mortgage Company — which is owned by Buffett’s Berkshire Hathaway Inc. — agreed to invest over $20 million in credit opportunities to the underserved communities that they are accused of discriminating against.

The agreement, announced by Assistant Attorney General Kristen Clarke during a press conference in Philadelphia, is the second largest in DOJ history.

The settlement is the latest move by the Justice Department in their initiative to combat redlining. Attorney General Merrick Garland announced the initiative last fall.

According to the complaint, which was filed in court on Wednesday, Trident Mortgage Company concentrated their offices in majority white neighborhoods and that loan officers were directed not to serve neighborhoods of color. These practices, Clarke said, violated the Fair Housing Act and the Equal Credit Opportunity Act.

Clarke also said that employees referred to communities of color as “ghettos,” made racist jokes, and that a Trident employee posed for a photo in front of a confederate flag.

“Even with the passage of the Fair Housing Act more than 50 years ago, banks and mortgage companies like Trident continue to find new ways to alter their lending practices in ways that cause harm to communities of colors,” Clarke said. “These discriminatory practices exacerbate wealth disparities and promote economic injustice.”

“Other non-depository lenders should be on notice that the Justice Department will continue to force federal housing laws to ensure equal opportunity to access credit,” Clarke said.

In a statement to CNN, a spokesperson for HomeServices, Trident Mortgage’s parent company, said that they “strongly disagree with the agencies’ interpretation of Trident’s prior lending practices.”

“Trident and any affiliated companies have never denied or discouraged access to mortgage loans or other services based on race,” the statement said. “We are committed to continuing to work to find more ways to serve homebuyers in every community we serve.”

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CNN’s Chris Isidore contributed to this report.

Article Topic Follows: CNN - Business/Consumer

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