FTC, Pennsylvania Lender Settle Race Bias Charges; Borrowers' Credit Risk Didn't Warrant Higher Loan Costs, Say Feds

In Horsham, Pennsylvania, the Philadelphia Inquirer reports:

• Gateway Funding Diversified Mortgage Services L.P., a Horsham mortgage lender, has settled federal allegations that it charged African Americans and Hispanics higher prices for loans than it did white borrowers, the government said yesterday.

• "We are not admitting that we did it," said Bruno Pasceri, president and chief executive officer of Gateway. "I can tell you we certainly do not discriminate against anybody. I'm glad it's over."

***

• The FTC found that Gateway loan officers charged several thousand African American and Hispanic consumers more - in higher interest rates and higher up-front charges - than was warranted, given the borrowers' credit risk.

• The settlement payment was set at $200,000, even though the FTC had alleged $2.9 million in damages to consumers. The FTC said it allowed the lower payment because of Gateway's "inability to pay."

***

• Irv Ackelsberg, a consumer attorney with Langer, Grogan & Diver P.C. in Center City, said millions of borrowers were paying more than they should be, feeding the nation's foreclosure problem.

For more, see Horsham lender settles discrimination case.

From the Federal Trade Commission in the matter of FTC v. Gateway Funding:

• Complaint For Permanent Injunction and Other Equitable Relief,
• Stipulated Final Judgment and Order For Permanent Injunction and Other Equitable Relief,
• FTC News Release.

Go here, Go here, and go here for other posts on alleged race bias in real estate transactions. DiscriminationPredatoryLendingAlpha