The National Community Reinvestment Coalition (NCRC) has filed fair housing complaints against two mortgage lenders for discriminating against prospective Black clients.
The complaints, filed on October 29, 2021, with the US Department of Housing and Urban Development (HUD), allege that the mortgage lenders demonstrated a preference for working with White homeowners, rather than Black homeowners.
The complaint against Movement Mortgage is based on tests conducted by NCRC in the Seattle/Tacoma MSA. NCRC conducted phone tests in which a White tester inquired about home loans and a Black tester, who was a better situated borrower, made the same inquiry. These tests showed that lending specialists provided different lending product information to White testers and failed to follow-up with Black testers – indicating discriminatory lending practices based on race.
Similarly, NCRC conducted testing that evaluated Fairway Independent Mortgage Corporation’s lending practices in the Charlotte, NC MSA. NCRC phone tests found that different information and more favorable services were provided to White testers – a fair housing violation under the Fair Housing Act.
NCRC regularly conducts matched-pair tests to determine whether housing providers and lenders treat clients equally, without regard to their race or other protected characteristics.
HUD reviews complaints to determine if an investigation is warranted, and if so then the agency attempts to have parties settle complaints through a mediation process. If mediation is not successful, then HUD determines if any violations of the Fair Housing Act occurred, and if so then it can issue fines and require staff training to prevent further discrimination. HUD has not yet issued a response to these complaints.
As a remedy, NCRC is seeking an end to the discriminatory practices and civil rights training for both of these lending institutes.