GFI Mortgage Bankers Settles Housing Discrimination Lawsuit | FHA News and Views

GFI Mortgage Bankers Settles Housing Discrimination Lawsuit | FHA News and Views:

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The FHA/HUD official site has issued a press release stating that “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.”

According to the press release, “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.”

HUD Assistant Secretary John Trasviña is quotes in the press release about the settlement, saying “No prospective home buyer should be saddled with a higher cost mortgage because of their race or national origin. This type of practice has no place in the mortgage market. HUD and the Justice Department have made a vigorous commitment to ending unlawful lending discrimination.”

The settlement provides $3.5 million, what the press release terms as “full compensation” to approximately 600 African-American and Hispanic GFI borrowers “identified by the United States as having paid more for a loan based on their race or national origin than similarly situated non-Hispanic white borrowers, and it requires GFI to pay the maximum $55,000 civil penalty allowed by the Fair Housing Act.”

Another result of the settlement? GFI is now required to develop and implement new policies that limit the pricing discretion of its loan officers, to document its loan pricing decisions, and to monitor loan prices for race and national origin disparities not justified by objective borrower credit characteristics or loan features.

We write about such issues here because it brings attention to the fact that in some cases, the borrower is the first defense against continued discriminatory practices by firms attempting to operate outside the law. If no reports are filed, no action can be taken. If you as a borrower, house hunter, or applicant experience discrimination in any portion of the housing process, be sure to report it to the FHA/HUD.

According to the press release, “Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visitwww.stopfraud.gov.”