HUD, DEUTSCHE BANK SUBSIDIARY AGREE TO $12.1 MILLION SETTLEMENT OF LENDING DISCRIMINATION CLAIMS

WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) has  announced that MortgageIT, Inc., an indirect subsidiary of Deutsche Bank, has agreed to pay $12.1 million under a Conciliation Agreement with HUD resolving allegations that the residential lender discriminated against African American and Hispanic borrowers seeking mortgage loans.  HUD had alleged that the lender’s practices contributed to minority borrowers being charged higher Annual Percentage Rates (APRs) and fees than similarly-situated white borrowers, and denied minority applicants loans more often than similarly-situated white applicants.

The Fair Housing Act prohibits housing discrimination in mortgage lending and real estate-related transactions based on a person’s race, color, national origin, religion, sex, familial status and disability.

“It’s creditworthiness and ability to pay that matter when you apply for a loan, not your race or where you come from,” said Bryan Greene, HUD’s Acting Assistant Secretary for Fair Housing and Equal Opportunity.  “This settlement reaffirms HUD’s commitment to ensuring that minorities have equal access to mortgage loan products and that lending institutions meet their obligations under the Fair Housing Act.”

This agreement is the result of a complaint that HUD’s Assistant Secretary for Fair Housing and Equal Opportunity filed against MortgageIT, alleging that the company discriminated against African American and Hispanic borrowers by underwriting, approving, purchasing, and securitizing mortgage loans in a manner that allowed pricing and denial disparities on the basis of race and national origin.  A HUD review of MortgageIT’s 2007 and 2008 internal loan data alleged that African American and Hispanic borrowers paid APRs that were eight to ten basis points higher, on average than similarly-situated white borrowers.  In addition, HUD alleged that African American borrowers were 65 percent and Hispanic borrowers 72 percent more likely to receive higher priced loans than similarly-situated white borrowers, African American and Hispanic borrowers also allegedly paid, on average, $707 and $906 more in fees, respectively.  HUD also alleged that African-American applicants were 45 percent more likely to be denied a mortgage loan than similarly-situated white borrowers.  Hispanic applicants were allegedly 35 percent more likely to be denied.

Under the terms of the agreement, MortgageIT will establish a $12.1 million fund to compensate borrowers nationwide who were unfairly been denied a loan or whose loans may have contained terms and conditions that violate the Fair Housing Act.  Any funds remaining after all victims have been compensated will be distributed to qualified organizations that provide credit and housing counseling, financial literacy, and other related programs that assist African American and Hispanic potential, current, and former homeowners.

Persons who believe they have experienced discrimination may file a complaint by contacting HUD’s Office of Fair Housing and Equal Opportunity at (800) 669-9777 (voice) or (800) 927-9275 (TTY).  Housing discrimination complaints may also be filed at www.hud.gov/fairhousing or by downloading HUD’s free housing discrimination mobile application, which can be accessed through Apple devices, such as the iPhone, iPad, and iPod Touch.