U.S.: A Warren Buffett company discriminated against Black homebuyers

A Pennsylvania mortgage company owned by billionaire businessman Warren Buffett’s company discriminated against Black and Latino homebuyers in Philadelphia, New Jersey and Delaware, the Department of Justice said Wednesday in what is being called the secondlargest redlining settlement in history.

Trident Mortgage Co., a division of Berkshire Hathaway’s HomeServices of America, deliberately avoided writing mortgages in minority neighborhoods in West Philadelphia; Camden, New Jersey; and in Wilmington, Delaware, the DOJ and the Consumer Financial Protection Bureau said.

As part of the agreement with the government, Trident will aside $20 million to make loans in underserved neighborhoods.

“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,” said Kristen Clarke, an assistant attorney general.

Redlining is a term used to describe when banks deliberately avoid making loans to non-white 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. The neighborhoods were almost always areas where racial minorities lived and even included other historically discriminated-against communities 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 to their white counterparts.

HomeServices of America said it strongly disagrees with the Justice Department’s and CFPB’s findings, noting that Trident did not have to admit to wrongdoing as part of the case. Buffett did not immediately respond to a request for comments but has usually deferred to Berkshire’s subsidiary companies to comment.