The Mortgage Firm agreed to pay $1.75 million to settle a lawsuit alleging that the company engaged in lending discrimination and redlining in mostly Black and Hispanic neighborhoods in South Florida.
The U.S. Justice Department alleged that the Mortgage Firm, an Altamonte Springs-based mortgage lender, engaged in unlawful redlining between at least 2016 to 2021 by avoiding providing home loans and other mortgage-related services in those neighborhoods across Miami-Dade, Broward and Palm Beach counties, according to the complaint.
The alleged redlining included having nearly all of its offices in this region in white neighborhoods and failing to conduct outreach, marketing and advertising to people in mostly Black and Hispanic neighborhoods.
The DOJ alleges the Mortgage Firm violated the Fair Housing Act and the Equal Credit Opportunity Act.
The complaint was brought by Markenzy Lapointe, U.S. Attorney for the Southern District of Florida, who recently announced his resignation. The Department of Justice announced the proposed settlement, which is pending court approval.
The Mortgage Firm is led by President Todd Pierson and is based just north of Orlando. The majority of its offices are in Florida.
The funds from the settlement will be provided via a loan subsidy program for affordable home purchases, refinancings and home improvement loans in predominantly Black and Hispanic neighborhoods in the greater Miami metro. This may include offering lower interest rates and assistance with down payments and closing costs. The Mortgage Firm will also be required to expand its outreach and marketing efforts and build connections in minority communities.
Assistant U.S. Attorney General Kristen Clarke said in a press release that non-bank lenders are responsible for a higher share of loans to homebuyers than bank and credit unions.
“With this trend comes the obligation to ensure full compliance with our federal laws that prohibit redlining,” she said. “… The Mortgage Firm violated the law, denied communities equal access to credit and exacerbated the racial wealth gap.”
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