On September 29, 2016, the Federal Financial Institutions Examination Council (FFIEC) announced the availability of 2015 mortgage lending data submitted in compliance with the Home Mortgage Disclosure Act (HMDA). This database of mortgage activity is relied upon by regulators, examiners, academics, industry leaders, and members of the general public to analyze the performance of mortgage lenders with [...]
On September 28, 2016, the Department of Justice (DOJ) announced a settlement with Charter Bank of Corpus Christi, Texas related to allegations of discriminatory lending practices on the basis of national origin. The complaint alleges that, from the beginning of 2009 through the second quarter of 2014, Charter Bank "charged hundreds of Hispanic borrowers higher interest [...]
The Justice Department has filed a lawsuit alleging that several mortgage loan modification service providers have violated the federal Fair Housing Act and Equal Credit Opportunity Act by discriminating against Hispanic homeowners. The defendants, The Home Loan Auditors LLC, Century Law Center LLC, SOE Assistance Center Inc., Spieker Law Office, targeted Hispanic homeowners for predatory [...]
On June 29, 2016, a new case was added to the growing list of evidence signaling the importance of redlining as a key area of focus for Fair Lending compliance. In a joint effort between the Consumer Finance Protection Bureau (CFPB) and the U.S. Department of Justice (DOJ), BancorpSouth was accused of several discriminatory practices related [...]
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, [...]
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 [...]
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 [...]
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 [...]
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, [...]
The Fidelity Bank, based in North Carolina, entered into a HUD-approved conciliation agreement with Fair Housing Project/Legal Aid of North Carolina, Inc., on April 23, 2016. The agreement requires the bank to earmark $500,000 or more per year for two years and to use those funds to make investments and community development loans in majority/minority census [...]
