DOJ: Warren Buffet-Owned Mortgage Company Discriminated Against Black and Latino Homebuyers


A Warren Buffet Berkshire Hathaway-owned Pennsylvania mortgage company discriminated against potential Latino and Black homebuyers in New Jersey, Delaware, and Philadelphia, according to the Department of Justice (DOJ), in what is now being called the second-largest redlining settlement in history.

Trident Mortgage Company, a division of Berkshire Hathaway’s HomeServices of America, deliberately avoided writing mortgages in minority-majority neighborhoods in Camden, New Jersey, Wilmington, Delaware, and in West Philadelphia areas like Malcolm X Park, according to the Consumer Financial Protection Bureau (CFPB) and DOJ said in their settlement with Trident.

As part of the agreement with the CFPB and DOJ, Trident will have to set aside $20 million to make loans in underserved neighborhoods. “Trident’s unlawful redlining activity denied communities of color equal access to residential mortgages, stripped them of the opportunity to build wealth, and devalued properties in their neighborhoods,” assistant Attorney General of the Justice Department’s Civil Rights Division, Kristen Clarke said in a prepared statement.

Redlining is when banks deliberately avoid loans to underserved or non-white communities. The U.S. government and banks used to draw maps with red markers outlining neighborhoods deemed undesirable areas to make home loans. These areas were almost always communities where racial minorities lived and included other communities historically discriminated against, like Jewish neighborhoods.

This practice essentially cut off whole communities from the most crucial pathway for wealth generation in the United States — homeownership. Even in 2022, Latino and Black households are significantly less likely to own their own home when compared to their white counterparts. The DOJ alleged the redlining happened between 2015 and 2019. Trident discontinued writing mortgages in 2020.

In addition to not writing mortgages in minority neighborhoods, employees of Trident also made hostile and racist comments about making loans to Black homebuyers, calling specific communities “ghettos.”
One employee, a manager at Trident, was photographed posing in front of the Confederate flag. Additionally, marketing materials used by Trident exclusively involved Caucasian individuals, and almost all the company’s staff were white.

Pennsylvania’s attorney general, Josh Shapiro, also running for governor, called Trident’s behavior “systematic racism, pure and simple.”

Philly has a long history of racism toward Black homebuyers

Philadelphia has had a long history of racism directed toward Black homebuyers. The Philadelphia City Council recently released a report that found that 95% of all home appraisers in Philadelphia were white, with a substantial racial gap between how homes are valued for white owners and how they are valued for Black owners.

Trident has agreed to pay a monetary fine of $4 million and to hire mortgage loan officers in impacted neighborhoods. Since Trident no longer runs a home loan lending business, it will contract a second, separate company to provide the $20 million in loan subsidies, according to the DOJ.

The settlement entered by Trident marks the first redlining case against a nonbank mortgage lender. Since the Great Recession, about half of all mortgages in the country are underwritten by companies who then quickly sell off the mortgage to investors. Nonbank lenders include firms like Rocket Mortgage and Loan Department, Quicken Loans, and others.

“Credit discrimination is illegal regardless of whether the lawbreaking company is a traditional bank or nonbank lender,” according to the director of the Consumer Financial Protection Bureau, Rohit Chopra.

HomeServices of America released a statement saying they “strongly disagree” with the CFPB and DOJ’s findings in the settlement and noted that Trident was not required to admit wrongdoing as part of the case.