loanDepot.com LLC and an appraisal management company have reached an agreement to settle claims that borrowers were discriminated against because their properties were located on Indian reservations.
A North Dakota couple and a California homeowner both filed complaints last year with the Department of Housing and Urban Development claiming they were discriminated against because of their race.
In both cases, the homeowners applied to refinance their properties which were located on American Indian Reservations. The houses were owned in fee simple.
In one of the cases,
Appraisal Management Services of America informed loanDepot.com that it couldn’t not provide an appraisal because the property was on “Indian land.” In the other case, loanDepot processed the loan but didn’t close when it discovered the location of the property.
The alleged actions violated the Fair Housing Act, HUD said in a statement.
“A homeowner’s creditworthiness and ability to pay should be the only thing that matters when they apply for a mortgage, not their race or the fact that their home is located on Native American lands,” HUD Assistant Secretary for Fair Housing and Equal Opportunity Anna MarÃa FarÃas said in the news release.
A conciliation agreement between the consumers, loanDepot and Appraisal Management was approved by HUD.
The agreement has loanDepot paying $240,000. The funds will go to the homeowners, a loan subsidy program and support outreach programs that improve housing conditions, teach financial literacy, and provide home ownership education to American Indians on and around reservations.
Both Foothill Ranch, California-based loanDepot and
Fountain Valley, California-based Appraisal Management agreed to revise their policies on doing business on American Indian reservations.
“Respondents deny having intentionally discriminated against complainants,” the agreement states.
A loanDepot spokeswoman didn’t immediately respond to a request for a statement.
