MortgageIT, a former Deutsche Bank unit, has reached a $12.1 million settlement to resolve claims that it discriminated against African-American and Hispanic home loan applicants. The Department of Housing and Urban Development alleged that MortgageIT charged black and Hispanic borrowers higher interest rates and fees, while also rejecting a disproportionate number of their mortgage applications -- a violation of the Fair Housing Act.
African-American borrowers were 65 percent more likely to receive higher-priced loans from MortgageIT and paid an average $707 more in fees, a HUD audit found. Hispanic borrowers were 72 percent more likely to receive higher-priced loans and paid an average $906 more in fees. The HUD review included company loan data from 2007 and 2008.
"It's creditworthiness and ability to pay that matter when you apply for a loan, not your race or where you come from," said Bryan Greene, HUD's acting assistant secretary for fair housing and equal opportunity. "This settlement reaffirms HUD's commitment to ensuring that minorities have equal access to mortgage loan products and that lending institutions meet their obligations under the Fair Housing Act."