RSSThe Consumer Financial Protection Bureau and Justice Department fined Madison, Wis.-based mortgage firm Fairway Independent Mortgage $1.9 million for redlining black neighborhoods in Birmingham, Ala.
According to the government, Fairway retail loan offices are concentrated in majority-white areas. Less than 4 percent of Fairway applications were for properties in majority-Black areas from 2018-22, compared to 12.2 percent for Fairway’s peer lenders, according to the agencies. The company allegedly did not address redlining risks other than informing loan officers not to discriminate before October 2022.
Fairway was the third-largest mortgage lender in the United States last year, receiving more than 100,000 applications and originating $24 billion in loans. The mortgage giant allegedly directed less than 3 percent of direct mail advertising to consumers in majority-Black neighborhoods from 2018-20.
The CFPB and DOJ ordered Fairway to provide $7 million for a loan subsidy program geared toward majority-Black neighborhoods and another $1 million for advertising and outreach, consumer financial education and partnerships with community and government organizations. The company is also required to open or acquire a loan production office or retail branch in a majority-Black neighborhood in Greater Birmingham.
“The CFPB and DOJ are holding Fairway accountable for redlining Black neighborhoods,” said CFPB Director Rohit Chopra. “Fairway’s unlawful redlining discouraged families from seeking loans for homes in Birmingham’s Black neighborhoods.”
