The Justice Department (DOJ) says a Pennsylvania mortgage company owned by billionaire Warren Buffett’s company discriminated against potential Black and Latino homeowners in Philadelphia, New Jersey and Delaware, reports ABC News. The DOJ said it was the second largest redlining settlement in history.
Trident Mortgage Co., a division of Berkshire Hathaway’s HomeServices of America, deliberately avoided writing mortgages in minority-majority neighborhoods in West Philadelphia such as Malcolm X Park, Camden, New Jersey, and Wilmington, Delaware, the Justice Department and the Consumer Financial Protection Bureau said in their settlement with Trident. As part of the agreement with the government, Trident will set aside $20 million to make loans in underserved neighborhoods.
“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,” said Kristen Clarke, an assistant attorney general with the Justice Department’s civil rights division.
Redlining is a term used to describe when banks deliberately avoid making loans to non-White communities. Banks and the U.S. government used to draw on maps in red marker those neighborhoods that were deemed undesirable to make home loans. The neighborhoods were almost always areas where racial minorities lived and even included other historically discriminated against communities such as Jewish neighborhoods.
Josh Shapiro, Pennsylvania’s attorney general who is running for governor, called the behavior “systematic racism, pure and simple.”
As part of the settlement, Trident agreed to hire mortgage loan officers in impacted neighborhoods as well as pay a $4 million fine. The Trident settlement also involves the first redlining case against a nonbank mortgage lender.