Monthly Archives: June 2016

Miami Predatory Lending Suit to be Considered by SCOTUS

On June 28, 2016, the Supreme Court of the United States (SCOTUS) agreed to hear appeals (Reuters, June 28, 2016) from Bank of America and Wells Fargo regarding lawsuits brought by the City of Miami in which the two large mortgage lenders were accused of discriminatory lending practices. Rather than ruling on the merits of the case, [...]

June 30th, 2016|

Using Regression to Enhance Fair Lending Underwriting CFRs

In this contribution to ADI Adviser, ADI Senior Economist Paul J. Strasberg discusses how integrating modeling results can enhance the selection of comparators for a comparative file review (CFR) in a Fair Lending analysis of underwriting. Paul demonstrates how the use of propensity score matching (PSM) "effectively removes the judgments that a lender’s compliance analyst might make when [...]

June 28th, 2016|

Evaluating Redlining Risk in Mortgage and Consumer Lending

In recent years, the Department of Justice (DOJ) and various federal, state, local and non-profit entities have generated many headlines about identifying and pursuing cases of redlining against financial institutions. Recent cases include: a $33 million settlement between Hudson City Savings Bank and the DOJ; an $825,000 settlement between Evans Bank and the Attorney General [...]

June 16th, 2016|

HUD, First-Citizens Bank Resolve Discriminatory Lending Complaint

The U.S. Department of Housing and Urban Development announced on Wednesday an agreement with First-Citizens Bank & Trust Company resolving allegations that the bank denied mortgage loans to African-American, Latino and Asian-American mortgage applicants at a disproportionately higher rate than white applicants. HUD filed its initial complaint in 2011 after reviewing 2010 Home Mortgage Disclosure Act [...]

June 9th, 2016|

Trend towards jumbo mortgages may raise risk exposure under Fair Lending, CRA

An article published by the Wall Street Journal (subscription required) on June 1, 2016 highlights a post-housing crisis trend towards jumbo mortgages within the mortgage market. The authors note that jumbo mortgages - home loans for amounts above $417,000 for most markets - allow lenders to satisfy one post-crisis mandate to take fewer risks within their portfolios, [...]

June 6th, 2016|