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Berkshire Hathaway-Owned Lender Pays $20 Million in Redlining Case

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The mortgage lender Trident Mortgage Company, owned by Berkshire Hathaway, has agreed to pay $20 million to settle state and federal prosecutors’ allegations that it worked to maintain people in nonwhite neighborhoods in and around Philadelphia from applying for home loans, in accordance with an announcement by the prosecutors on Wednesday.

As a part of the settlement, which the Justice Department called the second largest in its history, Trident will fund a program to attempt to jump-start lending within the neighborhoods it previously excluded from its business. The corporate, which not makes loans, will contract with a latest lender to open at the very least 4 offices in minority neighborhoods in Philadelphia, Camden, N.J., and Wilmington, Del.

In a news conference in Philadelphia on Wednesday, prosecutors from Pennsylvania, Latest Jersey and Delaware gathered with Justice Department officials and the director of the Consumer Financial Protection Bureau to announce the settlement and discuss the programs geared toward repairing the damage done by redlining, the practice of excluding certain populations — most notably Black Americans — and neighborhoods from a bunch of monetary and municipal services broadly available elsewhere.

“This settlement is a stark reminder that redlining isn’t an issue from a bygone era,” Kristen Clarke, assistant attorney general on the Justice Department, said in a press release emailed to reporters. She added that by failing to open offices in any minority neighborhoods and discouraging nonwhite customers from applying for loans, the corporate “denied communities of color equal access to residential mortgages, stripped them of the chance to construct wealth and devalued properties of their neighborhoods.”

In accordance with the Justice Department’s statement, Trident employees used racial slurs in emails and “referred to communities of color as ‘ghetto.’”

Trident, which made loans through Berkshire Hathaway’s regional mortgage brokers, stopped making loans in December 2020. Its representatives didn’t reply to voice mail and email messages in search of comment.

Mortgage lending has been a boon to Berkshire recently, as rock-bottom rates of interest early within the Covid pandemic spurred a home-buying boom. Company leaders declined to debate the Trident settlement.

Reached by phone, Debbie Bosanek, assistant to Warren Buffett, Berkshire’s owner, said: “There’s nobody here available for interviews.”

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