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Thursday, November 1, 2012

GFI Mortgage Bankers Pay over $3.5 Million to Settle Allegations of Racial Discrimination in Lending Practices

 

Racial discrimination or discrimination based on national origin in business practices, including mortgages, is illegal under numerous state and federal statutes. No prospective home buyer should be discriminated against, denied purchasing the house of their dreams, or be forced to pay a higher cost mortgage because of their race or national origin. Some  businesses still fail to comply with the law.
 
 GFI Mortgage Bankers Inc., a large independent home mortgage firm has agreed to pay over $3.5 million to settle allegations by federal prosecutors that it charged higher interest rates and fees on mortgages to nonwhite borrowers than to whites with similar financial backgrounds according to  a press release by the United States Attorney's office for the Southern District of NY. 
 
According to a United States Department of Justice Press Release, GFI settled at $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. U.S. District Judge Katherine B. Forrest approved the consent order, which was filed in federal court in Manhattan, where GFI is headquartered.
 
U.S. Attorney Preet Bharara stated: "With the settlement we announce today, the hundreds of victims of lending discrimination committed by GFI will be made whole, and the company has admitted the conduct that led to this lawsuit, and agreed to reform its residential lending practices. The swift resolution of this case demonstrates the commitment of this Office and of the entire Department of Justice to aggressively enforcing the laws against discriminatory lending, and to holding accountable those who engage in this illegal conduct." See the aforementioned United States Department of Justice Press Release
 
GFI does most of it mortgage business in the New York, New Jersey and Florida. GFI agreed to develop new policies to limit the discretionary decision making by their loan officers in deciding fees and rates of mortgages.
 
Manhattan U.S. Attorney Preet Bharara stated: "With the settlement we announce today, the hundreds of victims of lending discrimination committed by GFI will be made whole, and the company has admitted the conduct that led to this lawsuit, and agreed to reform its residential lending practices. The swift resolution of this case demonstrates the commitment of this Office and of the entire Department of Justice to aggressively enforcing the laws against discriminatory lending, and to holding accountable those who engage in this illegal conduct." See United States Department of Justice Press Release
 
"The settlement provides $3.5 million – 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. The settlement also requires GFI 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." See United States Department of Justice Press Release.  
 
 
Race discrimination in businesses other than the mortgage and lending business also has a history in New Jersey and New York. 
 
Newark, New Jersey Mayor Cory Booker has spoken publicly of discrimination in housing based on race that his family endured. 
 
During his Stanford University 2012 Commencement address, Mayor Booker told the story of how when his parents got transferred in their employment to the NY metropolitan area, they soon learned many of the nicest  towns with the best schools would not show the homes to black families. 
 
He relayed how every time his parents became interested in a house, they were told it was already already sold and the Fair Housing Council became involved. Every time his parents went to look at a house and was told it was sold, the Fair Housing Council sent a white couple, "the Browns" to see if it was true and his parents were eventually able to purchase the house they wanted over the realtor's objections. 
 

Contact Hope A. Lang Attorney at Law, today for a free consultation.

 
 

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