The MReport Webcast: Friday 9/25/2015

Action has been taken against Hudson City Savings Bank for discriminatory redlining practices by the Consumer Financial Protection Bureau and the Department of Justice, according to an announcement Thursday. Hudson City was accused of denying access to mortgage loans from residents that dwell in majority-Black-and-Hispanic neighborhoods.

Hudson City apparently found branches and loan officers, selected mortgage brokers, and marketed products to that discouraged potential borrowers in Black and Hispanic communities. The complaint alleged that these discriminatory practices went on from at least 2009 to 2013. If the court approves the proposed consent order, Hudson City will pay the largest redlining settlement in history. The fines will include a 25 million dollars in direct loan subsidies to qualified borrowers in the affected communities, 2 point 25 million dollars in community programs and outreach, and a 5 point 5 million dollar penalty.

Mortgage loan application defects took an unexpected turn in August and declined 2 point 4 percent, but there are questions as to whether or not loan defects will continue this downward trend. First American Financial Corporation released their Loan Application Defect Index for August 2015, which showed a 2 point 4 percent decrease in defects in August as compared with July and an 8 point 9 percent decrease compared with last year.