Lisa Mailhot | September 23, 2024
Buyers
OceanFirst Bank, a New Jersey-based lender, has agreed to pay $15.1 million to settle redlining allegations brought by the Department of Justice (DOJ). The case highlights the growing scrutiny over discriminatory lending practices in minority communities. The DOJ's anti-redlining initiative, launched in 2021, has resulted in settlements totaling over $137 million, affecting 13 lenders nationwide. Here's what you need to know.
Redlining refers to the discriminatory practice where financial institutions deny or limit loans in specific neighborhoods, often based on race or ethnicity. This practice is illegal under the Fair Housing Act, yet it remains a persistent issue in certain markets.
OceanFirst Bank’s trouble began after acquiring Sun National Bank in 2018 and Two River Community Bank in 2020. The DOJ alleged that despite expanding into new regions, the bank's loan activity in majority-Black, Hispanic, and Asian neighborhoods remained minimal. In fact, an analysis of data showed that only 1.9% of mortgage applications processed by OceanFirst were from these areas, compared to 17.4% by their competitors.
OceanFirst also came under fire for closing branches in minority neighborhoods while keeping locations in predominantly white communities open. The bank's marketing and outreach were also focused disproportionately on majority-white communities, contributing to a "pattern or practice of unlawful redlining," according to prosecutors.
OceanFirst has not admitted to any wrongdoing but agreed to a settlement to avoid prolonged litigation. The terms include:
“We are committed to ensuring that everyone in New Jersey has access to the American dream of homeownership, regardless of race, color, or national origin,” said Philip Sellinger, U.S. Attorney for the District of New Jersey.
Since the DOJ began its Combating Redlining Initiative in 2021, it has pursued several cases, with settlements exceeding $137 million. Other banks, like First National Bank of Pennsylvania and Ameris Bank, have also been implicated, with settlement funds being directed toward improving access to mortgage lending in minority neighborhoods.
This settlement sends a clear message: discriminatory lending practices will not go unnoticed, and banks are expected to comply with fair lending regulations.
OceanFirst Bank’s settlement underscores the importance of fair lending and equal access to homeownership for all communities. If you're looking to move, especially in neighborhoods that are fair and inclusive, let’s connect and explore the best options for you!
Reference: Carter, M. (2024, September 18). OceanFirst Bank settles DOJ redlining allegations for $15M. Inman.
In the aftermath of devastating LA wildfires, State Farm has requested a 22% insurance rate hike in California. Discover how this could impact homeowners, why wildfire… Read more
With rental market growth set to hit $5.35 trillion globally by 2025, investors can boost returns by diversifying portfolios, leveraging tech, and adopting proactive m… Read more
Baby boomers are holding tight to their real estate and assets, delaying the long-anticipated "Great Wealth Transfer." Learn how this affects millennials, Gen Xers, an… Read more
New-home sales defied expectations in December, rising 3.6% despite mortgage rates hovering around 7%. With builders offering incentives and inventory rising, now migh… Read more
As cities struggle with rising rents, micro-units are emerging as a practical solution for affordability and quality living. These compact, well-designed apartments of… Read more
Extreme weather is driving up home insurance premiums, with costs soaring 33% in recent years. Discover how climate risks are reshaping real estate markets, from risin… Read more
Michael Jordan's iconic Highland Park mansion, Champions Point, is now available for co-ownership starting at $1M. This unique opportunity offers luxury amenities, com… Read more
L.A. wildfires in January 2025 have put over $40 billion in real estate at risk, highlighting housing shortages and displacement concerns. Discover how these events im… Read more
Discover five powerful tax-saving strategies that could help you legally save over $20,000 on your taxes. From maximizing retirement contributions to leveraging HSAs a… Read more
Let's find a time that suits you best to chat about your goals, show you how we work, and figure out how we can help you the most