An Ohio-based lender has settled with the Department of Housing and Urban Development charges it denied mortgage financing to an African-American woman because of her race.
HUD announced the $125,000 settlement with Fifth Third Bank Monday.
According to the housing agency, the Cincinnati-based bank denied a home loan to Nannette Bishop for the purchase of a property in Newport, Ky., a suburb of Cincinnati.
Bishop applied for a $70,000 loan on a $130,000 home in August 2003, HUD said. A United Way agency was going to provide $60,000 toward the purchase under a special program for applicants with bad credit.
But even though Fifth Third claimed Bishop didn't qualify based on their underwriting guidelines, HUD said its investigation revealed that other applicants with worse than her were approved at the same time.
The bank reportedly denied the allegations but agreed to the settlement anyway.
In addition to the monetary penalty, the agreement with HUD requires Fifth Third to increase its qualified community development lending and donate REO properties and cash to local housing agencies.