NYC Home Lender To Cough Up $3.55M To Settle Fair Housing Allegations That It Clipped Blacks, Latinos For Higher Loan Prices Than Non-Hispanic Whites

From the U.S. Department of Justice (Washington, D.C.):

• GFI Mortgage Bankers Inc., a large independent home mortgage firm that concentrates on the New York, New Jersey, and Florida markets, will pay $3.555 million to resolve a lending discrimination lawsuit filed by the Department of Justice and the U.S. Attorney’s Office for the Southern District of New York.
  
  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 for similarly-qualified non-Hispanic white borrowers between 2005 and 2009.
  
  The settlement provides $3.5 million in compensation to approximately 600 African-American and Hispanic GFI borrowers identified by the United States as paying more for a loan based on their race or national origin, and it requires GFI to pay the maximum $55,000 civil penalty allowed by the Fair Housing Act.
  
  The settlement also 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.

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• The settlement came after the United States had filed its opposition to GFI’s motion to dismiss the case and the court had stated it was “skeptical” of GFI’s argument that federal law allows lenders to price loans in a way that produces such disparate impacts on minority borrowers.
  
  The settlement, which was entered by the court, was filed in federal court in Manhattan, where GFI is headquartered.

For the Justice Department press release, see Justice Department Reaches Lending Discrimination Settlement with GFI Mortgage Bankers Inc.