On September 30, 2013, the United States Department of Justice filed a lawsuit in the U.S. District Court for the Eastern District of Virginia on behalf of 3,100 African American and Hispanic residential mortgage borrowers against a bank, alleging that it engaged in discriminatory lending ...
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On September 30, 2013, the United States Department of Justice filed a lawsuit in the U.S. District Court for the Eastern District of Virginia on behalf of 3,100 African American and Hispanic residential mortgage borrowers against a bank, alleging that it engaged in discriminatory lending practices. The Office of the Comptroller of the Currency referred this case to the plaintiff after completing investigatory action because a bank purchased the defendant.
The plaintiffs alleged that, as a result of the defendant's policies and practices, African-American and Hispanic borrowers unfairly paid higher prices for their residential mortgage loans than non-Hispanic White borrowers. The complaint asked the court for a declaratory judgment, injunctive relief and monetary damages.
Specifically, the plaintiffs alleged that the defendant set wholesale loan prices unrelated to credit risk characteristics and loan terms. The defendant did not justify or document the reasons for the amount of broker fees and prices set above the par rate; failed to monitor for disparities based on race or national original because of its policies and practices; and created a financial incentive for mortgage brokers to charge higher fees and interest rates for loan applications submitted to the lender.
The plaintiff filed a proposed consent order on September 30, 2013, that was entered by the Court (District Judge Anthony J. Trenga) on October 3, 2013. Under the consent order, the defendant agreed to compensate certain African-American and Hispanic residential mortgage borrowers through a settlement fund.
After disbursing the $2,850,000 Settlement Fund to effected parties, more than $200,000 remained in the fund. On November 13, 2014, the court ordered this remaining money to be disbursed to three organizations chosen by the parties - National Council of La Raza, the Northern Virginia Urban League, and the Greater Washington Urban League.
After completing the disbursements, this case was dismissed on January 26, 2015. It is now closed.
Megan Richardson - 02/24/2014
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