Mortgage Aid Program Commences in Wake of 2022 Redlining Settlement

Mortgage Aid Program Commences in Wake of 2022 Redlining Settlement

A significant step towards rectifying the harm caused by discriminatory lending practices has been taken as millions of dollars in mortgage assistance are poised to assist individuals seeking homes in Philadelphia’s communities of color. This effort has been spurred by the actions of Trident Mortgage Co., formerly a prominent home lender in the city. The Pennsylvania Office of Attorney General recently announced the availability of $18.4 million, a sum aimed at supporting around 1,800 approved home loan applicants who have been affected by the practices of Trident.

The impetus for this aid stems from a resolution reached after a comprehensive investigation into redlining, led by the U.S. Department of Justice, the Consumer Financial Protection Bureau (CFPB), and the attorneys general of Pennsylvania, New Jersey, and Delaware. Trident’s involvement in discriminatory practices prompted this collaborative effort to address historical injustices.

The assistance provided through this initiative is capped at $10,000 per loan and extends beyond monetary aid. It can encompass various forms of support, including reduced interest rates, with the ultimate goal of offering substantial relief to those who have been adversely impacted. Officials anticipate that a substantial portion—about 70%—of this new assistance will be directed towards individuals in Pennsylvania.

Pennsylvania Attorney General Michelle Henry emphasized the significance of this effort, stating, “This subsidy program will make a difference to many hundreds, possibly thousands, of families impacted by historic redlining practices in Philadelphia.”

The investigation spanning four years unearthed distressing patterns of behavior within Trident. The company’s nearly all-white staff actively avoided providing mortgages in underserved Black and Latino neighborhoods across Philadelphia, South Jersey, and Delaware. This practice, known as redlining, perpetuated unequal access to credit and had detrimental consequences for communities of color.

Henry further explained, “For too long, companies have avoided offering mortgages in neighborhoods that are home to predominantly people of color, denying them equal access to mortgage credit. This is one small step toward correcting that injustice.”

The legacy of redlining, a practice that was facilitated by unfair lending practices and discriminatory policies, has cast a long shadow over communities of color. Even almost a century after the creation of racist appraisal maps, the adverse effects of disinvestment, poverty, and gun violence persist in many of the city’s redlined neighborhoods.

The aftermath of the settlement reached in July 2022 revealed a stark disparity in Trident’s lending practices. A thorough review of city property records and U.S. Census data demonstrated that Trident’s loans between 2015 and 2019 were concentrated primarily in predominantly white and affluent neighborhoods such as Chestnut Hill, Center City, Spring Garden, Fairmount, Bella Vista, and Queen Village.

With Trident ceasing its loan offerings, the funds will be disbursed through two programs, HomeAssist and HomeAccess, managed by Prosperity Home Mortgage. Additionally, the settlement mandates comprehensive community outreach and related support services. Prosperity is also required to establish new lending locations in designated communities of color, thus contributing to the restoration of equitable access to housing opportunities.

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