deral Trade Commission has charged Golden Empire Mortgage Inc. and its owner, Howard D. Kootstra, with violating federal law by charging Hispanic consumers higher prices for mortgage loans than non-Hispanic white consumers – price disparities that cannot be explained by the applicants' credit characteristics or underwriting risk. The FTC seeks to bar future violations and obtain redress for consumers. ‘Mortgage lenders must ensure that pricing discretion does not lead to illegal pricing discrimination," says FTC Chairman Jon Leibowitz. "The FTC will continue to enforce the fair lending laws so that American borrowers are treated equally based on their credit – not their race, national origin, or gender." According to the FTC's complaint, the defendants violated the Equal Credit Opportunity Act in pricing mortgage loans. They allegedly gave loan officers and branch managers wide discretion to charge, in addition to the risk-based price, "overages" through higher interest rates and higher up-front charges. The defendants allegedly paid loan officers a percentage of the overages as a commission and failed to monitor whether Hispanic consumers were paying higher overages than non-Hispanic white borrowers. The complaint was filed in the U.S. District Court for the Central District of California. SOUR
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