A mortgage company owned by Warren Buffett was fined $20 million for discriminating against Black and Latino homebuyers
Posted On July 28, 2022
- Trident Mortgage Co., owned by Warren Buffett’s Berkshire Hathaway, was accused of racial discrimination.
- The DOJ found Trident avoided writing mortgages to Black and Latino homebuyers and made racist remarks.
- According to a study, the home ownership rate for Black Americans is 43%, compared to 71% for white Americans.
A Pennsylvania mortgage company owned by billionaire businessman Warren Buffett’s Berkshire Hathaway discriminated against Black and Latino homebuyers, the Department of Justice said Wednesday.
Trident Mortgage Co., a division of Berkshire Hathaway, deliberately avoided writing mortgages in largely Black and Latino neighborhoods in Philadelphia, New Jersey, and Delaware, the DOJ found. As part of the settlement, Trident must pay $20 million to make loans in underserved neighborhoods.
The Justice Department called it the “second-largest redlining settlement in history.”
The settlement is part of the Justice Department’s efforts to crack down on modern-day redlining, a practice where banks and mortgage lenders actively avoid issuing loans to non-white communities.
Trident’s employees made racist comments about making loans to Black homebuyers, calling certain neighborhoods “ghettos,” the DOJ alleged.
One email between employees, sent under the subject line, “You know when you’re in the hood,” attached a photo of a wheelbarrow full of watermelons with a sign that read, “Apply for a Credit Card. Free Watermelon,” according to The Philadelphia Inquirer.
Another email included a photo of Trident manager posing in front of the Confederate Flag.
The DOJ also found that all marketing materials Trident used showed only white people, and there was a lack of diversity among the company’s staff.
Black homeownership rates are now lower than in 2010, despite an overall surge in homeownership in the US. The homeownership rate for Black Americans is just over 43%, compared to 72% for white Americans, according to a study by the National Association of Realtors. Black and Latino applicants are also more likely to be rejected for mortgage loans.
“Trident’s unlawful redlining activity denied communities of color equal access to residential mortgages, stripped them of the opportunity to build wealth, and devalued properties in their neighborhoods,” said Kristen Clarke, an assistant attorney general of the Justice Department’s Civil Rights Division, in a prepared statement.
A spokesperson at Trident’s parent company, HomeServices of America, emphasized “there has been no finding of wrongdoing by Trident” in the settlement.
“We strongly disagree with the agencies’ interpretations of Trident’s prior lending practices,” the spokesperson said in an emailed statement. “We are committed to supporting additional lending that will help to close the racial gap in homeownership.”