GFI Mortgage Bankers has agreed to pay more than $3.5 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,
This fraudulent activity took place between 2005 and 2009, the lawsuit said, effecting approximately 600 GFI borrowers.
New York-based GFI admitted in the settlement that an analysis of the note interest rates and fees that it charged on mortgage loans to qualified borrowers showed statistically significant disparities between non-Hispanic white borrowers and both African-American and Hispanic borrowers that could not be explained by objective borrower characteristics or loan product features.
Secondly, the company provided financial incentives for its loan officers to charge higher interest rates and fees to specific borrowers. Also, GFI did not have fair lending training and monitoring programs in place to prevent those interest rate and fee disparities from occurring.
As part of the settlement, GFI now has to 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.
Additionally, GFI will be required to pay the maximum $55,000 civil penalty allowed by the Fair Housing Act for conducting this fraudulent practice.
