Mortgage Giant to Pay $9.9M in DOJ Settlement for Alleged Redlining in Black Birmingham Neighborhoods

By William Thornton | wthornton@al.com Fairway Independent Mortgage Corp. must pay nearly $10 million in a settlement over allegations by the U.S. Justice Department and the Consumer Financial Protection Bureau (CFPB) that the lender engaged in keeping credit from predominately Black Birmingham neighborhoods. The Justice Department and Consumer Financial Protection Bureau (CFPB) announced today that Fairway has agreed to pay $8 million, and a $1.9 million civil money penalty, to resolve allegations of redlining, or lending discrimination. The Justice Department and CFPB allege that Fairway, through its marketing and sales actions, discouraged residents of Black neighborhoods from applying for mortgage loans. Fairway will provide $7 million for a loan subsidy program to offer affordable home purchase, refinance and home improvement loans in Birmingham’s majority-Black neighborhoods. It will also invest $1 million in programs to support that loan subsidy fund, and pay a $1.9 million civil penalty to the CFPB’s victims relief fund. Headquartered in Madison, Wisc., Fairway operates in the Birmingham area under the trade name MortgageBanc. Attempts to contact Fairway for comment were not immediately successful. “Birmingham lies at the heart of our nation’s civil rights struggle but is also a community that bears the legacy of discriminatory redlining...