Pennsylvania mortgage company Trident Mortgage Co., owned by billionaire Warren Buffett’s Berkshire Hathaway, used discriminatory practices against Black and Latino homebuyers in Philadelphia, New Jersey, and Delaware, ABC News reports. The Department of Justice and the Consumer Financial Protection Bureau require Trident to set aside $20 million to make loans in underserved neighborhoods in a settlement. This would be considered the “second-largest redlining settlement in history.”
“Credit discrimination is illegal regardless of whether the lawbreaking company is a traditional bank or a nonbank lender,” said Rohit Chopra, director of the Consumer Financial Protection Bureau.
The Black homeownership rate is lower now than in 2010. Black and Latino applicants are more likely to be rejected for mortgage loans. Through their investigation, the DOJ alleges Trident stopped writing mortgages in 2020. In addition, employees made racist comments about making loans to Black homebuyers, calling specific neighborhoods “ghettos.”
A manager was photographed posing in front of the Confederate Flag. All the marketing materials Trident used explicitly showed white people only, and there was a lack of diversity among the company’s staff.
One message, sent under the subject line “You know when you’re in the hood” and highlighted in a 23-page complaint filed Wednesday in federal court in Philadelphia, contained a photo of a wheelbarrow full of watermelons with a sign that read “Apply for a Credit Card. Free Watermelon.”
Trident will also hire mortgage loan officers in impacted neighborhoods and pay a monetary fine of $4 million. A separate company will be contracted to provide the $20 million in loan subsidies because Trident no longer operates as a lending business. This settlement is the first against a nonbank mortgage lender.
“Trident’s unlawful redlining activity denied communities of color equal access to residential mortgages, stripped them of the opportunity to build wealth, and devalued properties in their neighborhoods,” said Kristen Clarke, an assistant Attorney General of the Justice Department’s Civil Rights Division, in a prepared statement.