Facts

The U.S. government filed a complaint against Plaza Home Mortgage Inc. alleging violation of the Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA).

Plaza was a nationwide wholesale mortgage lender. In 2009, the Federal Trade Commission identified Plaza as a lender with a high rate of disparity between white and minority borrowers. The FTC then investigated Plaza, which eventually led to the filing of this lawsuit.

PLAINTIFF'S CONTENTIONS:
Plaintiff contended that defendant violated FHA by engaging in a pattern or practice of lending discrimination. Plaintiff also contended that defendant violated the ECOA by allowing its wholesale brokers to charge certain borrowers, particularly African-American and Hispanic borrowers, higher broker fees for residential real estate-related loans than non-Hispanic white borrowers.

DEFENDANT'S CONTENTIONS:
Defendant denied all allegations. Defendant contended that it complied with the laws and exercised fair lending in a non-discriminatory manner. Moreover, that any discrepancy was attributable to legitimate, non-discriminatory factors.

Result

The parties entered into a consent decree in which Plaza agreed to stop engaging in any discriminatory act or practice and to remedy the alleged discrimination. Plaza also agreed to implement loan pricing policies designed to avoid unlawful discrimination. Moreover, Plaza agreed to a monitoring program that would ensure its compliance. Plaza also agreed to provide $3 million in settlement.