GFI Mortgage Bankers Pays $3.5M To Settle Discrimination Lawsuit

Posted by Orb Staff on August 29, 2012 No Comments
Categories : Residential Mortgage

12294_dollars2 GFI Mortgage Bankers Pays $3.5M To Settle Discrimination Lawsuit New York-based GFI Mortgage Bankers Inc. has agreed to pay $3.5 million to settle a lending discrimination lawsuit filed by the U.S. Department of Justice (DOJ) and the U.S. Attorney's Office for the Southern District of New York.

According to the DOJ, the lawsuit alleges that GFI engaged in a pattern or practice of discrimination by pricing residential mortgage loans for qualified African-American and Hispanic borrowers higher than those for similarly qualified non-Hispanic white borrowers between 2005 and 2009. The settlement provides compensation to approximately 600 African-American and Hispanic GFI borrowers, and it also requires GFI to pay the maximum $55,000 civil penalty allowed by the Fair Housing Act. Â

Furthermore, the settlement requires GFI to develop and implement new policies that limit the pricing discretion of its loan officers, require documentation of loan pricing decisions, and monitor loan prices for race and national origin disparities not justified by objective borrower credit characteristics or loan features.

As part of the settlement, GFI admits that an analysis of the note interest rates and fees that it charged on mortgage loans to qualified borrowers showed statistically significant disparities between non-Hispanic white borrowers and both African-American and Hispanic borrowers that could not be explained by objective borrower characteristics or loan product features. The company also admits that it provided financial incentives to its loan officers to charge higher interest rates and fees to borrowers and that it did not have fair lending training and monitoring programs in place to prevent those interest rate and fee disparities from occurring. Â

‘The Justice Department will not hesitate to litigate against lenders to enforce federal fair lending laws where the evidence warrants and to obtain compensation for borrowers who were victims of unlawful lending practices,’ says Thomas E. Perez, assistant attorney general for the DOJ's civil rights division.

Register here to receive our Latest Headlines email newsletter




Leave a Comment