Fairway Independent Mortgage Responds to CFPB and Justice Department Announcement

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Fairway Independent Mortgage Corporation

Oct 15, 2024, 19:27 ET

MADISON, Wis., Oct. 15, 2024 /PRNewswire/ -- Fairway Independent Mortgage Corporation, named #1 for customer satisfaction among mortgage origination companies in the J.D. Power 2023 U.S. Mortgage Origination Satisfaction Study, responded today to an announcement released today by the CFPB and Justice Department:

In 2021, the first full day after the Biden Administration took office, the Consumer Financial Protection Bureau ("Bureau") began an investigation into Fairway Independent Mortgage Corporation ("Fairway" or the "Company") to determine whether the Company's mortgage lending activities in the Birmingham-Hoover, AL Metropolitan Statistical Area ("Birmingham MSA") were being conducted in compliance with the Equal Credit Opportunity Act ("ECOA").
The government agencies' allegations in today's complaint, filed days before the impending Presidential election, were provided to Fairway for the first time only after settlement was reached. The complaint significantly mischaracterizes the matter at issue and appears to be intentionally inflammatory in nature. For one, the complaint characterizes Fairway's actions as willful and reckless, a claim that was mutually rejected by the parties prior to settlement. In addition, the complaint characterizes Fairway's actions as willful and intentional, despite the government agencies' failure to identify any evidence to support such a claim. Fairway is disappointed by these statements in the complaint, which suggest bad faith by the part of the government agencies.
In bringing the investigation, the Bureau had reviewed the loan application data that Fairway had previously reported under the Home Mortgage Disclosure Act and performed an analysis that compared the ratio of Fairway's lending in majority-White versus majority-Black census tracts to the White/Black ratio of other lenders. This analysis focused on quotas of White/Black census tract lending rather than actual volume of applications and originations in majority-Black census tracts.
Despite a multi-year investigation, which included a referral to the U.S. Department of Justice (DOJ), the government agencies did not identify any evidence of redlining or other discrimination by Fairway. Rather, the government agencies relied on a quota analysis to allege that Fairway was not meeting the needs of residents of majority-Black census tracts, in contravention of the U.S. Supreme Court's 2023 decisions regarding affirmative action.
The government agencies refused to consider the fact that Fairway took more loan applications and made more loans, in terms of number of loan units, in majority-Black census tracts than any other non-bank lender with a physical presence in the Birmingham MSA. The government agencies also refused to consider Fairway's lending performance among residents of majority-Black census tracts who may have chosen properties outside of their neighborhoods and elsewhere in the Birmingham MSA, which indicates the government's preference for furthering racial segregation.
Fairway vigorously defended itself against the government agencies' allegations and continues to deny that the Company engaged in any discriminatory behavior. Fairway also maintains strong disagreement with the government agencies' legal and statistical approach to identifying potential discrimination. However, to resolve the matter and curb the further expenditure of resources, Fairway determined that a settlement with the Bureau and the DOJ would be the most appropriate solution.
In part, the settlement allows Fairway the opportunity to redirect financial resources to majority-Black neighborhoods via loan subsidies, consumer financial education, and community development. Fairway hopes that these efforts will further increase lending opportunities for those seeking to purchase properties in majority-Black census tracts of the Birmingham MSA. However, the settlement does not authorize the agreed-upon loan subsidy to be offered to residents of majority-Black census tracts unless they remain in a property located in such tracts.

About Fairway Independent Mortgage Corp.
Madison, WI- and Carrollton, TX-based Fairway Independent Mortgage Corporation (NMLS #2289) is a full-service mortgage lender licensed in all 50 states. Fairway is the #2 overall retail lender in the U.S. and was the #1 ranked mortgage origination company for borrower satisfaction in 2023 by J.D. Power.

SOURCE Fairway Independent Mortgage Corporation