Mortgage lender Sage Bank sued by DOJ for alleged discriminatory practices

December 02, 2015
Lowell, Mass.-based mortgage lender Sage Bank will pay $1.175 million to resolve allegations brought by the U.S. Department of Justice (DOJ) that it violated the Fair Housing Act and the Equal Credit Opportunity Act by charging African-American and Hispanic borrowers higher prices for home loans than it did for white borrowers with comparable creditworthiness.
     As per a DOJ press release, Sage Bank had a pricing policy in place wherein each of its loan officers was assigned a "target price," which was the price a loan officer was required to achieve on each home loan, regardless of a borrower's creditworthiness.
     The DOJ's complaint alleges that the loan officers who were assigned higher target prices disproportionately served African-American and Hispanic borrowers. The complaint also alleges that loan officers had the discretion to price loans above their target prices and did so to a greater extent for African-American and Hispanic borrowers than for white borrowers.