A home mortgage lender that previously settled Federal Trade Commission charges of discriminatory lending will have to hire an outside consultant to make sure it does not illegally charge higher prices to African-American and Hispanic consumers.
The mortgage lender, Gateway Funding Diversified Mortgage Services, L.P., and its general partner, Gateway Funding Inc, agreed to hire the consultant as part of an agreement with the FTC. According to the agency, Gateway failed to create its own effective fair-lending monitoring program even though it agreed to do so in December 2008 to settle FTC charges of illegal lending practices that violated the Equal Credit Opportunity Act. (See December 16, 2008 press release http://www.ftc.gov/opa/2008/12/gateway.shtm). Under the modified court order announced today, the third-party consultant will have to be approved by the FTC, and must do detailed analyses and annual assessments of their lending for five years. The lender will have to take remedial steps the consultant recommends. The agreement also limits Gateway’s discretion over pricing until the consultant certifies that an adequate monitoring program is in place.
The Commission vote to authorize staff to file the proposed modified stipulated final order was 4-0. The modified stipulated final order was filed on Jan. 22 in the U.S. District Court for the Eastern District of Pennsylvania. More information about consumers’ rights under fair lending law is available at http://www.ftc.gov/bcp/edu/pubs/consumer/homes/rea08.shtm.
NOTE: Stipulated final orders are for settlement purposes only and do not constitute an admission by the defendants of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.