Fairway Mortgage Faces Penalties in Redlining Case

Fairway Independent Mortgage Corporation was penalized by the U.S. Justice Department and the CFPB for alleged redlining in Black neighborhoods in Birmingham, Alabama. They are set to pay $1.9 million and offer $7 million in subsidies. Fairway disputes the claim, agreeing to a settlement.

The U.S. Justice Department and the Consumer Financial Protection Bureau have sanctioned Fairway Independent Mortgage Corporation over claims of redlining in African-American neighborhoods in Birmingham, Alabama—a charge the company denies.

Fairway will pay a $1.9 million fine and provide $7 million in loan subsidies, according to the CFPB. The company opted for a settlement, citing it as the most appropriate course of action.

U.S. Attorney General Merrick Garland emphasized this case as a stark reminder of the ongoing prevalence of redlining, an illegal lending discrimination practice, outlawed in 1974. According to Garland, this action underscores the Justice Department's broader initiative to address racial inequality in mortgage lending.

(With inputs from agencies.)