DOJ finds Warren Buffett owned mortgage company discriminated against Black & Latinx homebuyers
Trident Mortgage Company agrees to the second largest redlining settlement in history, $20 million to be set aside by Trident for underserved neighborhoods.
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The Department of Justice announced Wednesday, July 27, that the Warren Buffett owned mortgage company, Trident, had agreed to the second largest redlining settlement in history. $20 million will be set aside in loans by Trident to go towards underserved neighborhoods.
The Department of Justice found the Pennsylvania based mortgage company had discriminated against potential Black and Latinx homebuyers in areas around Philadelphia, New Jersey, and Delaware. Additionally, the DOJ and the Consumer Financial Protection Bureau in the settlement said the company purposely avoided writing mortgages in Black and Latino majority neighborhoods, such as Malcolm X Park in West Philadelphia; Camden, New Jersey; and Wilmington, Delaware.
As Trident stopped writing loans back in 2020, the redlining activity occurred in the four year period between 2015 and 2019. Other than deliberately not writing loans to the marginalized, according to the settlement, employees of Trident had made racist comments towards Black and Latino homebuyers seeking loans, including calling certain neighborhoods, “ghettos.” A photograph of one of the managers was revealed standing in front of the confederate flag. Trident’s entire staff is nearly all White with all marketing using White individuals.
With that being said, Philadelphia has a long history of racism towards Black and Latinx communities. A report released Wednesday, July 26, from the Philadelphia City Council revealed that an overwhelming 95% of the city’s home appraisers are White with a gap that remains between how much a home of a Black and Latinx individual is valued compared to White homeowners.
Assistant Attorney General of the Justice Department’s Civil Rights Division, Kristen Clarke, said in a statement, “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.”
Redlining is used to describe the deliberate act of banks avoiding writing loans to non-White communities. Historically, banks and the government used red marking to outline what they deemed undesirable to make home loans which always was Black, Latinos, and even Jewish neighborhoods in past times.
This has set off an historical trend that even to this day, Latinos and Blacks are less likely to own a home compared to their White counterparts. Just another means of cutting off the road to wealth and prosperity.
Director of the Consumer Financial Protection Bureau, Rohit Chopra, said in a statement, “Credit discrimination is illegal regardless of whether the lawbreaking company is a traditional bank or a nonbank lender.”
Trident is a division of Berkshire Hathaway’s HomeServices of America. In response to the findings from the DOJ, HomeServices of America said they “strongly disagree” with the results and noted Trident for the case did not have to admit any wrongdoing.
The Justice Department announced as part of the settlement, Trident will pay a $4 million fine as well as hire mortgage loan officers in underserved neighborhoods. As Trident no longer writes loans, a contracted company will provide the $20 million in loan subsidies.