On Wednesday, the US government filed a lawsuit accusing JPMorgan Chase of mortgage discrimination. This entails that the major financier charged “minority” borrowers higher mortgage interest rates and fees between 2006 and 2009 when compared against the “similarly situated white borrowers.”
In this case, of course, “minority” definitely refers to black and Hispanic borrowers.
According to the statement in the suit: “In thousands of instances, an African-American borrower with the same credit and risk profile as a white borrower, entering into the same type of Chase…mortgage, paid higher loan rates and larger fees,” alleging, of course, that the very same thing occurred among Hispanic borrowers as well.
The lawsuit has been filed by US attorney Preet Bhara, of the Southern District of New York, under allegations that the nation’s largest bank had, in fact, charged higher mortgage rates and fees to at least 100,000 black and Hispanic home buyers between 2006 and 2009. However, these loans had been originated by independent mortgage brokers who were not employed through the bank.
According to the suit, the average black borrower paid approximately $1,126 more over the first five years of their average loan amount of $191,000 [compared to “similarly situated white borrowers”]. Similarly, the average Hispanic borrower most likely paid roughly $968 more on their average loan amount of $236,800 [compared to “similarly situated white borrowers”].
JPMorgan Chase, of course, denies the allegations, saying it did nothing wrong and that the rates offered were set by the individual mortgage brokers (and not the bank providing the money).
The lawsuit goes on to describe: “Even when Chase had reason to know there were disparities, however, Chase did not act to determine the full scope of these wholesale pricing disparities, nor did it take prompt and effective action to eliminate those disparities, nor did it engage in adequate efforts to remedy the impact of those disparities upon the borrowers.”
In response, the bank states: “We’ve agreed to settle these legacy allegations that relate to pricing set by independent brokers. We deny any wrongdoing and remain committed to providing equal access to credit.”