By Sophie Nieto-Munoz
A Pennsylvania mortgage company owned by billionaire Warren Buffett deliberately discriminated against Black and Latino homebuyers in New Jersey, Pennsylvania, and Delaware, federal officials said Wednesday while announcing a $20 million settlement with the firm.
A U.S. Department of Justice investigation found Trident Mortgage Company, one of the Camden region’s top mortgage lenders, engaged in redlining practices — systemically underserving and avoiding services in majority-minority neighborhoods — in Camden, Burlington, and Gloucester counties, plus Philadelphia and Wilmington.
Federal officials are calling this the second-largest redlining settlement in history. Prosecutors determined Trident’s discriminatory practices violated the Fair Housing Act, Equal Credit Opportunity Act, and the Consumer Financial Protection Act.
“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,” Assistant Attorney General Kristen Clarke said in a statement.
Trident Mortgage, owned by Buffett’s Berkshire Hathaway, avoided writing mortgages in neighborhoods with a high number of residents of color, kept its offices in largely white neighborhoods, used mostly white families on marketing materials, and employed a staff that was almost all white, the Department of Justice said in a complaint released Wednesday.
From 2015 to 2019, loan officers were told not to serve minority communities, according to the complaint.
The Justice Department said they uncovered emails filled with racist jokes, slurs, and references to minority neighborhoods as “ghetto.” Federal prosecutors also found a photo with a senior manager standing in front of a Confederate flag who faced no disciplinary action when the photo circulated among staff, according to the complaint.
The company stopped operating as a lender in December 2020.
In an emailed statement, a spokesperson for Berkshire Hathaway HomeServices, the real estate business that Trident served, said the company “strongly” disagrees with federal officials’ characterization of its prior lending practices.
“Trident and any affiliated companies have never denied or discouraged access to mortgage loans or other services based on race. We are committed to continuing to work to find more ways to serve homebuyers in every community we serve,” the statement reads.
The company wants to support additional lending to help close the racial gap in homeownership, the statement says.
Laura Sullivan, director of the New Jersey Institute of Social Justice’s economic justice program, said Wednesday’s news shows redlining continues today.
“Redlining is not a thing of the past,” Sullivan said. “Our research shows that redlining from the 20th Century has ongoing and continuing impacts, but unfair lending and this form of modern-day redlining persist, and it is really important that this settlement has occurred and the state and federal governments are working to ensure that families of color and Black families, in particular, have equal access to lending opportunities.”
As part of the agreement announced Wednesday, Trident will dedicate $20 million to signing loans in underserved communities in New Jersey, Pennsylvania, and Delaware. The money will be used to reinvest in communities hardest hit by redlining practices.
Trident will also pay $250,000 to the state Division on Civil Rights, which investigated the lending practices. And the mortgage company must ensure four new branch locations open in minority-majority neighborhoods, including one in the Camden area.
The New Jersey Institute of Social Justice issued a report on Black homeownership in May that noted Black homeowners with incomes between $75,000 and $100,000 have higher median interest rates than those for white borrowers with incomes less than $30,000.
“Families of color were targeted for predatory lending during the Great Recession, and they continue to have higher lending rates across the country for equally qualified candidates,” Sullivan said.
Sophie Nieto-Munoz is a reporter for the New Jersey Monitor, a sibling site of the Pennsylvania Capital-Star, where this story first appeared.