The vigorous pace of settlements between the government and mortgage firms over allegations of discriminatory lending practices continues in Michigan.
Among companies to recently settle are
Eagle Bank and Trust Company of Missouri, Provident Funding Associates LP and RPM Mortgage Inc.
Two of those settlements, like several others recently, were tied to yield spread premiums earned on loans to minorities, while the third was for redlining.
Often in these cases, companies are settling just to avoid prolonged litigation and legal expenses.
The latest settlement was between
Mortgage One Inc. and the Department of Housing and Urban Development, according to an announcement Tuesday.
HUD claims that the Sterling Heights, Michigan-based company discriminated against
a borrower with disabilities on a loan insured by the Federal Housing Administration.
Mortgage One and its loan officers, Nancy Doody, allegedly
required the loan applicant to provide intrusive and unnecessary documentation about his disabilities before approving his mortgage.
The alleged actions violated the Fair Housing Act.
“The case came to HUD’s attention when an applicant for a loan with Mortgage One filed a complaint alleging that the lender delayed his application because of his disabilities,” the statement said. “Specifically, the man alleged that before closing on the loan, Mortgage One requested that he provide verification from his doctor that his disability is permanent and/or a letter from the Social Security Administration stating that he would remain on disability for at least three years.”
HUD reached a conciliation agreement with Mortgage One that requires a $10,000 payment to the borrower.
In addition, the lender’s production staff will be advised that they cannot
discriminate against FHA loan applicants who derive income from a public assistance program by seeking personal medical information.
