DOJ Files Complaint Against GFI Mortgage Bankers

April 11, 2012
Last week the Department of Justice filed a complaint against GFI Mortgage Bankers, Inc. of New York.  DOJ alleged “that GFI engage in a pattern or practice of discrimination on the basis of race and national origin by charging African-Americans and Hispanic borrowers higher interest rates and fees on home mortgage loans compared to similarly-situated white borrowers.”  Some of the key points in the compliant are:
·         GFI is a relatively small organization with $768 million in revenues and 2,270 mortgages in 2009.  At issue are 300 loans to African-Americans and 340 loans to Hispanics.
·         DOJ alleges GFI charged higher rates and fees to African-Americans and Hispanics.
·         The case, which is not over yet, began in 2007 and was referred to DOJ by HUD in 2010 with the complaint being filed in April 2012 – a total of 58 months; almost 6 years so far!
·         GFI continued its alleged discriminatory practices even after the complaint was filed.
·         GFI failed to adequately supervise, train or monitor its loan officers and had no written policies or procedures.
Some take-aways from this complaint are:
·         Smaller institutions are not immune to fair lending complaints from the prudential regulators and others such as HUD.
·         Monitoring APRs and interest rates charged is not enough.  Fees must be part of your fair lending analysis.
·         Continuing alleged discriminatory practices even after a complaint is filed is hard to understand.
·         Institutions need to supervise, train, and monitor loan officers and have written fair lending policies and procedures.
·         Nearly 6 years of regulatory scrutiny is a great reason to do fair lending analysis.
Preiss&Associates has been doing custom fair lending analyses for 20 years.  If you have fair lending questions, want to talk about your fair lending issues or have need for us to assist you with your fair lending program give us a call at 847-295-6881 or drop us an email at
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