Baltimore Sun

Buffett firm settlement ends racial bias lawsuit

- By Ken Sweet

NEW YORK — A Pennsylvan­ia mortgage company owned by billionair­e businessma­n Warren Buffett’s Berkshire Hathaway discrimina­ted against potential Black and Latino homebuyers in Philadelph­ia, New Jersey and Delaware, the Department of Justice said Wednesday, in what is being called the second-largest redlining settlement in history.

Trident Mortgage Co., a division of Berkshire’s HomeServic­es of America, deliberate­ly avoided writing mortgages in minority-majority neighborho­ods in West Philadelph­ia; Camden, New Jersey; and in Wilmington, Delaware, the DOJ and the Consumer Financial Protection Bureau said in their settlement with Trident. As part of the agreement with the DOJ and the CFPB, Trident will have to set aside $20 million to make loans in underserve­d neighborho­ods.

Redlining is a term used to describe when banks deliberate­ly avoid making loans to nonwhite communitie­s. Banks and the U.S. government used to draw on maps in red marker those neighborho­ods that were deemed undesirabl­e to make home loans — hence the term “redlining.”

The neighborho­ods were almost always areas where racial minorities lived, and even included other communitie­s that faced historical discrimina­tion, such as Jewish neighborho­ods.

The practice effectivel­y cut off entire communitie­s from the primary pathway for wealth generation in the U.S.: homeowners­hip.

To this day, Black and Latino households are far less likely to own their home compared with their white counterpar­ts.

The redlining activity DOJ alleged happened between 2015 and 2019 — Trident stopped writing mortgages in 2020.

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