Company Owned By Warren Buffett Discriminated Against Black Homebuyers, Federal Prosecutors Say
A Pennsylvania mortgage company owned by billionaire Warren Buffett's Berkshire Hathaway Inc., has reached a $24 million settlement to resolve federal charges of intentionally discriminating against Black and Latino homebuyers in Philadelphia, New Jersey and Delaware, the Associated Press reports.
Trident Mortgage’s discriminatory practices is the second largest redlining settlement in the nation’s history, the Department of Justice said. Redlining is the discriminatory practice of systematic preventing people from buying homes in certain areas, based on their race, ethnicity or religion.
“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,” Kristen Clarke, an assistant Attorney General of the Justice Department’s Civil Rights Division, said.
Under the settlement, Trident did not admit or deny wrongdoing.
According to authorities, Trident declined to write mortgages in minority-majority neighborhoods in West Philadelphia like Malcolm X Park; Camden, N.J., and in Wilmington, Del.
The company agreed to set aside $20 million to make loans in underserved neighborhoods, pay a $4 million fine and hire mortgage loan officers in impacted communities.
Prosecutors also accused Trident of tolerating a racist culture, Reuters reports. They cited examples that included a failure to discipline a senior vice president who posed in front of a Confederate flag for a picture, as well as employee emails that said “BE PROUD TO BE WHITE!" and one referring to underserved communities as “ghetto.”
Trident’s parent company, Berkshire’s HomeServices of America, said Trident never denied or discouraged mortgage loans because of an applicant’s race, adding that it has committed to helping “close the racial gap in homeownership.
Buffett was not accused of wrongdoing, according to Reuters.
But this isn’t the first time that Buffett’s company has been accused of racist lending practices. In 2018, an investigative report by RevealNews.org accused Trident of exclusively serving white clients. The report noted that Trident hires a nearly all-white team of mortgage consultants and has offices located only in white neighborhoods.
According to the Associated Press, the largest redlining case involved Wisconsin-based Associated Bank, which settled allegations of discriminatory lending in 2015 for $200 million.
