The Federal Trade Commission has mailed $1.5 million worth of refund checks to over 3,100 Hispanic borrowers who received mortgage loans from Golden Empire Mortgage.
The Bakersfield, Calif., lender allegedly charged Hispanic borrowers higher fees than white borrowers and the company agreed to pay $1.5 million to settle the FTC's charges of discriminatory lending practices.
Golden Empire denies any wrongdoing and "strongly disagreed with the pricing methodology employed by the commission to evaluate pricing disparities for Hispanic borrowers," the company said in a statement.
FTC claims the lender gave its loan officers and branch managers "wide discretion" to charge overages.
As part of the settlement, GEM agreed to restrict its loan officers’ pricing discretion and create a fair lending monitoring program.
FTC initiated its investigation based on loan pricing data the California lender submitted in its 2006 Home Mortgage Disclosure Act report.
"Golden Empire made every effort to resolve the matter and avoid litigation," the company said. But FTC filed a lawsuit against the lender in May 2009.
The $1.5 million settlement agreement was reached in September 2010. FTC said on Monday that it had mailed the refund checks.
