Remediation sought form NJ bank
State reports bias in mortgage practices
By: Maddie McGay
NorthJersey.com
USA Today Network - New Jersey
..... New Jersey officials are seeking remediation on behalf of residents affected by discriminatory mortgage practices uncovered by a multiple-year investigation into Republic First Bank, said a report issued Tuesday [10/29/2024] by Attorney General Matthew Platkin.
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Republic First Bank's residential mortgage business violated the New Jersey Law Against Discrimination, according to an investigation launched in 2022 by the Attorney General Office, in collaboration with the state Division on Civil rights and the Division of Law. The law prohibits lenders from making or setting the terms of home loans on the base of race of national origin.
..... The report said Republic First Bank engaged in a pattern of unlawful mortgage redlining practices, in which the bank avoided making home loans in predominately Black, Hispanic and Asian communities throughout New Jersey.
..... "Republic's peer lenders originated loans to Black borrowers at over 1.5 times the rate Re pubic did, to Asian borrowers at about 2.5 times the rate Republic did, and to Hispanic borrowers at over 3 times the rate Republic did," the report said.
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It was found that about 6% of Republic First Bank's home loans were originated to residents in predominately Black, Asian and Hispanic neighborhoods. That is less than one-third the rate at which the bank's peer lender originated loans to residents of the same neighborhoods, the report said.
..... This mortgage redining was said to be most apparent in Atlantic, Burlington, Camden, Cape May and Gloucester counties. The report said the bank engaged in almost no mortgage lending in neighborhoods of color in these counties, but engaged in significant mortgage lending in mainly white neighborhoods.
..... "As the report explains, the State's investigation found that Republic knew about the bank's under performance in generating mortgage applications from, and originating loans to, people of color, but repeatedly failed to take corrective action to address these sever disparities," said a statement announcing the findings.
..... "In fact, between 2018 and 2022, those disparities worsened, and Republic continued to generate few applications from, and originate few loans to, people of color."
..... The report outlined four main findings signaled the bank's unlawful mortgage red-line practices: failing to take action to address its failure to lend to communities of color; concentrating its storefront bank branches and offices in predominately white communities; failing to conduct meaningful advertising in communities of color; and repeatedly making policy exceptions for white and high-income borrowers while denying applications from Black, Asian and Hispanic individuals at higher rates.
..... In April 2024, during the investigation, Republic First Bank was closed by the Pennsylvania Department of Banking and securities after a decline in deposit a decrease in the value of tis mortgage loan portfolio, among other things, Forbes reported. the Philadelphia-based regional bank - which had more than half of its 32 branches in South Jersey before its closure -was seized by the Federal Deposit Insurance Corporation and its loan portfolio was acquired by Fulton Bank.
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As a result of the banks closure and the findings of the investigation, New Jersey officials have field a claim with the FDIC to seek monetary relief for residents who were affected by Republic First Bank's unlawful mortgage redlining practices between 2018 and 2022, there report said. the claim is currently pending before the FDIC.
..... "Homeownership is one of the most critical ways that New Jerseyans build wealth. But decades of mortgage redlining and discrimination have denied communities of color an equal chance to build wealth through homeownership," said Sundeep Iyer, director of the Division on Civil Rights.
..... "Our investigation of Republic's practices unfortunately shows that redlining is not merely a thing of the past. That's why we will continue our work to hold accountable those who engage in these egregious and discriminatory practices, and why combating housing discrimination will continue to be a priority for our office."