Connecticut mortgage lenders are coming under more scrutiny after a recent settlement highlighted practices that discriminated against minority populations.
The Connecticut Fair Housing Center claimed that Liberty Bank in particular hadn’t loaned to enough African American and Latino families, and rejected their loan applications at higher rates than white applicants.
These kinds of problems exist for most lenders, but it’s hard to define the scope, said Dave Lavery, an attorney with the Fair Housing Center.
“Some of it probably stems from inherent and implicit biases that people have against minorities," Lavery said. "Some of it may stem from a lack of adequate controls at the bank, a lack of adequate training.”
The center looked at the top lenders in the state and found that all of them weren’t lending at rates the reflected the communities they were in. And with the rise of internet ads, companies can be even more targeted, which could make the problem worse, Lavery said.
"Hopefully institutions understand that underserved communities have qualified loan applicants, and it's in the interest of the institution to originate loans, I mean, that's how they make money," he said.
As part of its settlement, Liberty Bank agreed to set aside more money for underserved communities, as well as help minorities with the costs of applying. Liberty Bank did not immediately respond to a request for comment.