Movement Mortgage will pay $75,000 to resolve allegations of racial discrimination, in violation of the Fair Housing Act, identified by undercover testers from the National Community Reinvestment Coalition.
The agreement resolves a complaint the NCRC filed in October 2021 with the Department of Housing and Urban Development. NCRC alleged the Fort Mill, South Carolina-based retail lender discriminated against Black and Hispanic people seeking mortgages in the Seattle-Tacoma area.
NCRC testers made inquiries about mortgage financing with a loan officer at Movement Mortgage on two occasions, four months apart, during 2021. The court filing alleges the LO attempted to steer a minority tester into Federal Housing Administration financing, and did not follow up with either of the two minority testers as he did with the white testers.
In addition to the alleged discrimination testers identified, NCRC claimed public data show patterns of discrimination. NCRC alleged that Movement Mortgage had significantly higher application withdrawals and lower approvals in majority-minority census tracts compared with majority White census tracts, which it said amounted to redlining.
“NCRC’s testing data showed that Movement Mortgage agents engage and facilitate an inviting application process for prospective White applicants but fail to extend those same services to prospective Black applicants,” the complaint reads. “This behavior results in fewer prospective Black borrowers filing applications and further impacts the number of approvals in majority-minority census tracts.”
NCRC had previously provided training to Movement Mortgage, at the lender’s request, in 2019. The community group’s findings, however, “reinforced the need not only for training but for continuing monitoring,” said Brad Blower, NCRC general counsel.
How To Increase Production and Help Customers Achieve Wealth Through Homeownership
This case study explores how Fulton Mortgage Company achieved its goal of delivering a more personalized, digital mortgage experience for borrowers, while also increasing production and return on assets.
Presented by: Mortgage Coach
NCRC has sought to gum up bank merger approvals with accusations of redlining, extracting more than $500 billion in community benefits agreements with banks since 2016.
But to resolve NCRC’s allegations of racial discrimination, Movement Mortgage will pay $75,000. Of that sum, $65,000 will go to NCRC to defray its costs and $10,000 to Seattle-based nonprofit Washington Homeownership Resource Council, to provide financial literacy, housing education and counseling for persons in majority-minority census tracts in the Seattle area.
Counsel for Movement Mortgage did not return a request seeking comment.
Blower said that it was a credit to Movement Mortgage that the lender resolved the allegations so quickly.
“Sometimes we have to wait years for resolution,” Blower added. The nonprofit has a number of pending fair housing complaints before HUD.
Demetria McCain, HUD’s principal deputy assistant secretary for fair housing and equal opportunity, said it is “imperative” that lenders comply with fair housing laws. “HUD will continue working to ensure that all applicants are treated equally,” McCain said.
Movement mortgage employees will complete additional fair lending training as part of the agreement with HUD.
As part of the agreement, Movement Mortgage will also organize an event in Seattle, dubbed “Grab the Key.” The program is intended to improve homeownership rates of Black homebuyers, HUD said in a press release. Grab the Key started as an educational and awareness video for the mortgage industry, Movement Mortgage has said.
Montell Watson, director of diversity lending at Movement Mortgage, has also said the lender had a goal of increasing its market share within diverse communities and “bringing more diverse loan officers into the industry.”
Editor’s note: The name of the loan officer named by HUD in this action has been removed after HUD removed his name from the complaint. This story previously underreported the dollar figure banks have agreed to pay in community benefits agreements in recent years.
