Trident Mortgage Co. to pay more than $24 million in redlining settlement

Trident Mortgage Co. has reached a settlement with various federal and state agencies regarding allegations that it engaged in lending discrimination in the Philadelphia metropolitan area.

The U.S. Department of Justice (DOJ), the Consumer Financial Protection Bureau (CFPB) and the attorneys general of Pennsylvania, New Jersey and Delaware were investigating Trident regarding claims of redlining, or the deliberate abstention from providing credit services to those living in certain areas because of the predominant race, national origin or skin color of those communities.

A complaint filed in federal court alleges that from at least 2015 to 2019, Trident failed to provide mortgage lending services to neighborhoods of color in Philadelphia as well as nearby cities such as Camden, New Jersey, and Wilmington, Delaware. The complaint also alleges that Trident maintained offices concentrated in majority-white neighborhoods and avoided sending loan officers to market to majority-minority neighborhoods.

While Trident’s self-defined areas did include minority areas, the CFPB said that the company’s application data showed that it didn’t serve neighborhoods within its market areas equally. More than 25% of neighborhoods within the Philadelphia metro are are majority-minority, but only 12% of Trident’s mortgage applications came from majority-minority neighborhoods. Of the applications Trident did receive from such areas, most of the applicants were white.

Further, it’s alleged that Trident staff sent and received work emails containing racial slurs and racist comments about making loans to Black homebuyers. Such communications involved instances of referring to minority communities as “ghetto” and included pejorative content specifically regarding property locations and appraisals. One Trident manager was allegedly in a picture posing in front of the Confederate flag.

“This settlement is a stark reminder that redlining is not a problem from a bygone era,” said Kristen Clarke, assistant attorney general for DOJ’s civil rights division. “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.”

According to the DOJ, this is the first redlining settlement that the department has reached with a nonbank lender, as well as the second-largest redlining settlement in the department’s history.

Per the terms of the settlement, Trident — a division of Berkshire Hathaway, owned by billionaire mogul Warren Buffett — has agreed to invest more than $20 million to increase credit opportunities in neighborhoods of color in the Philadelphia area. Specifically, Trident will invest at least $18.4 million in a loan subsidy fund for residents of Philadelphia area minority neighborhoods. This includes $750,000 for the development of community partnerships to provide services that increase access to residential mortgage credit; $875,000 for advertising and outreach; and $375,000 for consumer financial education.

Additionally, Trident will pay a $4 million civil penalty to the CFPB.

Trident stopped accepting mortgage applications in 2021, so it will instead contract with another lender to provide loan subsidies and services to the redlined communities. The settlement requires Trident to ensure that this lender employs at least four mortgage loan officers dedicated to serving neighborhoods of color in and around Philadelphia, Camden and Wilmington; maintains at least four offices in these neighborhoods; and employs a full-time manager of community lending to helm continued lending development in minority neighborhoods within the Philadelphia market.

“Last fall, I announced the department’s Combatting Redlining Initiative and promised that we would mobilize resources to make fair access to credit a reality in underserved neighborhoods across our country,” U.S. Attorney General Merrick B. Garland said. “As demonstrated by today’s historic announcement, we are increasing our coordination with federal financial regulatory agencies and state attorneys general to combat the modern-day redlining that has unlawfully plagued communities of color.”

“Trident illegally redlined neighborhoods in the Philadelphia area, excluding qualified families seeking to own a home,” CFPB director Rohit Chopra said. “With housing costs so high, it is critical that illegal discrimination does not put homeownership even further out of reach.”


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