Coakley
BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced a civil rights settlement on Tuesday with the commonwealth's largest residential mortgage lender.
As part of the agreement, Mortgage Master Inc. will distribute $250,000 to Massachusetts borrowers, consumer organizations and the state. Mortgage Master was allegedly involved in discriminatory practices against African-American borrowers.
The company will also implement aggressive safeguards to make sure there are no disparities in the costs or fees charged for a home mortgage loan based on a borrower's race.
"Lenders must take affirmative steps, as Mortgage Master has done, to ensure that fair lending and non-discrimination is the rule, as well as the result," Coakley said. "Where lenders are going to provide room for discretion, they need to make sure that their employees are properly trained and that adequate safeguards are in place to ensure that racial bias does not affect lending decisions."
Mortgage Master will make two financial distributions as part of the settlement. The company will pay $95,000 to Coakley's office to make payments to African-American borrowers in Massachusetts who obtained a home mortgage loan from the company between 2004 and 2008. It is estimated that 200 borrowers will receive payments ranging from $250 to $1,000 each. The company will also pay $155,000 to be granted to not-for-profit groups that provide fair lending, consumer and financial education services for people in Massachusetts.
The company also agreed to take several steps to ensure compliance with anti-discrimination laws. For each of the next three years, Mortgage Master will train its employees in anti-discrimination laws. tThe curriculum will be subject to review by Coakley's office.
Also for the next three years, Mortgage Master will provide its loan data to a pair of fair lending monitors that will determine whether borrowers have received fair terms of credit. If the review indicates substantial racial disparities, the company will make a payment to affected borrowers.
In addition, Mortgage Masters will conduct a full-scale review of its underwriting and loan origination policies to ensure all fair lending practices are implemented.
The company fully cooperated with Coakley's review of this matter.
"Mortgage Master will be implementing important best practices to promote fair lending, and I encourage all lenders who do business in Massachusetts to follow its lead," Coakley said.
Massachusetts law prohibits discrimination on the basis of ethnicity, gender, race, and other bases in the terms of credit extended to borrowers.