Berkshire Hathaway subsidiary settles U.S. mortgage redlining charges
2022.07.27 20:26
FILE PHOTO: A view of the downtown skyline in Philadelphia, February 12, 2015. REUTERS/Charles Mostoller/File Photo
(Reuters) – A mortgage subsidiary of Warren Buffett’s Berkshire Hathaway (NYSE:BRKa) Inc has agreed to pay $22.4 million to settle U.S. government charges that it intentionally discriminated against minority families in the Philadelphia area.
In a joint statement on Wednesday, the Department of Justice and the Consumer Financial Protection Bureau said Trident Mortgage Co actively discouraged people in majority-minority neighborhoods from applying for mortgages or mortgage refinancings, through a process known as redlining.
The agencies said Trident developed marketing campaigns that discouraged minority loan applications and employed loan officers almost exclusively in majority-white neighborhoods, while employees often distributed racist emails and used racist tropes.
Wednesday’s settlement is the first by the U.S. government involving illegal discrimination by a nonbank mortgage lender.
Trident’s lawyers and its parent HomeServices of America, itself a Berkshire unit, did not immediately respond to requests for comment.
The $22.4 million payment includes a $4 million civil fine, and $18.4 million to subsidize loans for minority applicants. Trident will also spend $2 million on ads to generate applications and serve credit needs in redlined areas.
Trident stopped accepting mortgage loan applications in 2021.
