HMDA Probes Eye Pricing Discretion

Ongoing investigations and examinations of institutions flagged by Home Mortgage Disclosure Act data for possible fair-lending violations are focusing on pricing discretion at the retail and wholesale level, according to an industry attorney and litigator.As the inquiries peel back several layers of the onion, "an awful lot of the focus has really turned on pricing discretion," Skadden Arps attorney Andrew Sandler said. Justice Department and state attorney general investigators, as well as bank examiners, are looking at what kind of discretion retail lenders are giving their employees in pricing prime and subprime loans. On the wholesale side, they are looking at how the lender regulates the pricing practices of mortgage brokers. "There has been some focus on redlining, reverse redlining, steering," Mr. Sandler said, in cases where pricing disparities between minorities and whites seem to have a geographical explanation. Mr. Sandler spoke at an American Law Institute - America Bar Association financial services institute in Washington.