Florida Mortgage Company Settles Over Claims of Lending Discrimination Against Minority Home Buyers

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An announcement from the United States Justice Department's (DOJ) Office of Public Affairs details a settlement agreement that has been reached between the DOJ and a mortgage lending company based out of Seminole County, Florida for its alleged participation in discrimination against minority home buyers.

According to the January 7, 2025, announcement, The Mortgage Firm, Inc. has agreed to pay a $1.75 million settlement to resolve the allegations that it has engaged in a pattern and practice of lending discrimination by specifically redlining predominantly Black and Hispanic neighborhoods in the Miami-Fort Lauderdale-West Palm Beach, Florida Metropolitan Statistical Area, also known as Miami MSA.

Redlining is an illegal practice in which lenders avoid providing credit services to individuals living in communities of color because of the race, color, or national origin of residents in those communities.

“Non-depository institutions, including mortgage companies, are now originating a higher share of loans to homebuyers than banks and credit unions,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “By denying predominantly Black and Hispanic neighborhoods in the greater Miami area access to credit, The Mortgage Firm violated the law, denied communities equal access to credit, and exacerbated the racial wealth gap. This settlement will provide impacted communities in Miami with expanded access to homeownership, and makes clear that no matter the type of financial institution — bank, credit union or mortgage company — the department is committed to rooting out redlining across the country.”

The Mortgage Firm is a non-depository mortgage company headquartered in Altamonte Springs out of Seminole County, Florida. The complaint, filed in the Southern District of Florida, alleges that The Mortgage Firm violated the Fair Housing Act and Equal Credit Opportunity Act by failing to provide equal access to mortgage lending services to densely populated Black and Hispanic neighborhoods in the Miami MSA. The complaint also alleges that The Mortgage Firm discouraged people in these communities from seeking and obtaining home loans.

The Mortgage Firm has nestled its offices into predominantly white neighborhoods; the DOJ states that it took inadequate steps to market to and develop referral networks within Black and Hispanic neighborhoods. As a result, The Mortgage Firm generated mortgage loan applications in predominantly Black and Hispanic neighborhoods in the Miami MSA at rates far below its peer institutions.

The proposed settlement consent order, which still awaits court approval as of publication, would require The Mortgage Firm to:

• Conduct a Community Credit Needs Assessment to identify the credit needs of residents of predominantly Black and Hispanic neighborhoods in the Miami MSA and to consider the results of that assessment to develop future loan programs, marketing campaigns and outreach efforts.
• Provide $1.75 million for a loan subsidy program to offer affordable home purchase, refinancing, and home improvement loans in predominantly Black and Hispanic neighborhoods in the Miami MSA. The program may provide lower interest rates, down payment assistance, closing cost assistance or payment of initial mortgage insurance premiums.
• Conduct a detailed assessment of its fair lending program in the Miami MSA, specifically as it relates to fair lending obligations and lending in predominantly Black and Hispanic neighborhoods.
• Enhance its fair lending training and staffing to ensure equal access to credit is provided across The Mortgage Firm’s market area, including by maintaining a Director of Community Lending.
• Expand its outreach and advertising efforts by maintaining an office location in a majority-Black and Hispanic neighborhood in Miami-Dade County, translating its website into Spanish and requiring all of its loan officers in the Miami MSA to engage in marketing to majority-Black and Hispanic neighborhoods.
• Bolster connections with the community and build referral sources in predominately Black and Hispanic neighborhoods by providing four outreach events per year, six financial education seminars per year and partnering with one or more community partner to increase access to credit in predominately Black and Hispanic neighborhoods in the Miami MSA.

The Justice Department opened its investigation into The Mortgage Firm’s lending practices after receiving a referral from the Consumer Financial Protection Bureau. This settlement marks the Justice Department’s 16th redlining settlement under the Combating Redlining Initiative, and the third non-depository institution to reach a redlining settlement with the department.

According to the DOJ, non-depository lenders, which are not traditional banks and do not provide typical banking services, engage in mortgage lending and now make up the majority of mortgages in the United States. Under the Combating Redlining Initiative, the department has secured over $153 million in relief for communities of color that have been the victims of lending discrimination. This historic amount of relief is expected to generate over $1 billion in investment opportunities to address unequal access to credit in communities of color across the country.

“Our efforts to protect everyone’s civil rights is never ending,” said Haitian-born U.S. Attorney Markenzy Lapointe for the Southern District of Florida. “The unlawful practice of lending discrimination is not merely a thing of the past, but persists in this country, to include within the Southern District of Florida. Our office is fully committed in ensuring that every person living in the Southern District of Florida, to include residents in predominantly Black and Hispanic neighborhoods, can achieve the American dream of building wealth through home ownership. We will continue to work with the Civil Rights Division to hold those lenders accountable who engage in unlawful discriminatory practices in our diverse district.”

A copy of the complaint and proposed consent order, as well as information about the Justice Department’s fair lending enforcement work, can be found at www.justice.gov/fairhousing.

Individuals may report suspected lending discrimination by calling the Justice Department’s housing discrimination tip line at 1-833-591-0291 or submitting a report online.

Article by Rachael Volpe