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Trident Mortgage Company, Owned by Berkshire Hathaway, Accused of Redlining in Philadelphia
In a major crackdown on discriminatory lending practices, the Justice Department, Consumer Financial Protection Bureau, and Attorneys General of Pennsylvania, New Jersey, and Delaware announced a settlement with Trident Mortgage Company (Trident), a mortgage lender owned by Berkshire Hathaway, Inc., to resolve allegations that it engaged in a pattern or practice of lending discrimination by ‘redlining’ in the Philadelphia metropolitan area.
The resolution, which represents the Justice Department’s first redlining settlement against a mortgage company and is the second-largest redlining settlement in Justice Department history, alleges that Trident avoided providing mortgage lending services to neighborhoods of color in the Philadelphia metropolitan area, concentrated its offices in majority-white neighborhoods, and failed to direct its loan officers to serve the credit needs of neighborhoods of color.
According to the complaint filed in federal court, Trident’s redlining practices occurred from at least 2015 to 2019 and included:
- Violating the Fair Housing Act and the Equal Credit Opportunity Act, which prohibit financial institutions from discriminating on the basis of race, color, or national origin in their mortgage lending services;
- Failing to provide mortgage lending services to neighborhoods of color in the Philadelphia metropolitan area;
- Concentrating its offices in majority-white neighborhoods;
- Failing to direct its loan officers to serve—and its loan officers did not serve—the credit needs of neighborhoods of color;
- Avoiding its outreach and marketing efforts in neighborhoods of color;
- Exchanging work e-mails containing racial slurs and messages referring to communities of color as ‘ghetto’.
As part of the settlement, Trident has agreed to invest over $20 million to increase credit opportunities in neighborhoods of color in the Philadelphia metropolitan area, including:
- $18.4 million in a loan subsidy fund;
- $750,000 for development of community partnerships to provide services that increase access to residential mortgage credit;
- $875,000 for advertising and outreach;
- $375,000 for consumer financial education.
Trident will also pay a civil money penalty of $4 million.
Because Trident is no longer lending, it will contract with another lender to provide loan subsidies and services to the ‘redlined’ communities and will ensure that the lender: maintains at least four mortgage loan officers dedicated to serving neighborhoods of color in and around Philadelphia, Camden, and Wilmington; maintains at least four office locations in those neighborhoods; and employs a full-time manager of community lending who will oversee the continued development of lending in neighborhoods of color in the Philadelphia metropolitan area.
Separately, Trident has entered into agreements with the Commonwealth of Pennsylvania and the States of New Jersey and Delaware. Under those agreements, which resolve allegations against both Trident and Fox & Roach LP (a real estate affiliate of Trident), Trident will reimburse Pennsylvania and New Jersey for costs that they incurred in conducting their investigations, and Fox & Roach will invest $150,000 in marketing to communities of color in the Philadelphia metropolitan area.
In a statement, U.S. Attorney Jacqueline C. Romero said, ‘For far too many years, Philadelphia’s Black, Latino, and other communities of color have been denied access to mortgage credit because of Trident’s discriminatory practices. This settlement represents a major step forward in ensuring that all communities have equal access to financial opportunities.’
Key Facts
- State: Pennsylvania
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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