Photo: GFI Mortgage Sued for Overcharging Latinos
The Department of Justice filed a lawsuit alleging that GFI Mortgage Bankers Inc., violated federal fair lending laws by charging African-American and Hispanic borrowers higher interest rates and fees.
The complaint alleges that GFI engaged in a pattern or practice of discrimination on the basis of race and national origin by charging African-American and Hispanic borrowers higher interest rates and fees on home mortgage loans compared to similarly-situated white borrowers.
For example, an African-American borrower who took out a home mortgage loan in 2007 paid on average approximately $7,500 more over the first four years of the loan than a similarly-situated white borrower. For a Hispanic borrower, the difference was approximately $5,600 more over the first four years of the loan than a similarly-situated white borrower.
The disparities, based on race or national origin, are statistically significant, and are unrelated to credit risk or loan characteristic.
During the period 2005 through 2009, when the discrimination occurred, the number of home mortgage loans issued by GFI increased from 974 in 2005 to 2,270 in 2009. At the same time, GFI’s revenue from its home mortgage loan services increased from $305 million in 2005 to $768 million in 2009.