CFPB, DOJ Flag Fairway Independent For Redlining
By Sarah Wolak, National Mortgage Professional
Fairway Independent Mortgage Corp. (Fairway) settled yesterday with the Consumer Financial Protection Bureau (CFPB) and the U.S. Department of Justice (DOJ) following allegations from regulators of mortgage lending discrimination in majority-Black neighborhoods in the greater Birmingham, Ala. area.
The CFPB and DOJ allege that Fairway illegally redlined Black neighborhoods, including through its marketing and sales actions, which resulted in consumers’ apprehension from applying for mortgage loans in the Birmingham metropolitan area’s Black neighborhoods.
In addition to Fairway allegedly redlining Black neighborhoods, regulators claim that from 2018 to 2022, only 3.7% of Fairway’s applications were for properties in majority-Black areas, compared to 12.2% for peer lenders. In neighborhoods with 80% or more Black residents, Fairway’s lending rate was less than one-eighth that of its peers.
Awaiting court approval, the settlement requires Fairway to pay a $1.9 million fine to the CFPB’s victims relief fund, provide $7 million for a home loan subsidy program in majority-Black neighborhoods, and contribute at least $1 million to the communities it was accused of redlining.
