The New York-based Fair Housing Justice Center has filed a federal lawsuit accusing M&T Bank of discrimination in mortgage lending practices on the basis of race and national origin.
The FHJC said it filed the suit in Manhattan Federal Court based on results of an investigation conducted in 2013 and 2014, using a combination of white, African-American, Hispanic and South Asian "testers" posing as first-time homebuyers. Nine "testers" are also plaintiffs in the suit.
Buffalo-based M&T said it had just become aware of the suit and was preparing a comment about it.
The FHJC said its investigation focused on an M&T program called "Get Started," which the bank promotes as featuring a low down payment and the ability to finance closing costs.
The lawsuit contends M&T "uses neighborhood racial demographics to limit the availability of one of its home mortgages, a loan product for first-time home buyers with advantageous terms such as a lower down payment. The bank's loan officers in New York City hide the racial criteria from some prospective home buyers, use the criteria to discourage others from using the product, racially steer prospective buyers, and offer different loan terms and conditions based on race or national origin."
The FHJC says the loans effectively steer minority borrowers into minority neighborhoods.
The FHJC contends loan officers often encouraged minority "testers" to use "Get Started" to buy their first home, but white "testers" were "often not told about the program or were overtly discouraged from using it."
The organization also claims its "testers" found differences in the neighborhoods they were advised to move into and the loan amounts they were told they would qualify for. The group said it assigned its minority testers "more income, greater assets, fewer debts and better credit scores than their white counterparts."
The FHJC's executive director, Fred Freiberg, said in a statement: "The bottom line is that race and national origin appears to be infecting the policies and practices of this lender in a way that limits housing choice, provides unequal information based on race and national origin, and fosters residential segregation."
The FHJC said its lawsuit seeks to "stop the discrimination and ensure future compliance with fair housing and fair lending laws, in addition to damages, costs and attorney's fees."
©2015 The Buffalo News. Distributed by Tribune Content Agency
