Buffett firm settlement ends racial bias lawsuit
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.