A major New Jersey mortgage lender will fork over a $1.75 million fine for, among other things, entering clients’ ethnicity as white even when they declined to provide information on race or said they belonged to another ethnicity.

The Consumer Financial Protection Bureau (CFPB) announced the fine against Freedom Mortgage on Thursday. The Mount Laurel-based company is a major mortgage provider, issuing more than 50,000 loans a year between 2013 and 2016 and employing more than 700 loan officers across multiple call centers, according to the CFPB.

However, despite its size, Freedom Mortgage’s proprietary computer system would prevent its loan officers from completing clients’ applications if certain information — including on race and ethnicity — was missing. To get around this software limitation, managers at the company told loan officers simply to select “non-Hispanic white” for people who didn’t provide their own ethnicity, a CFPB settlement document reveals.

The CFPB noted in the document that loan officers were told to enter than information “regardless of whether that was accurate.” The agency also mentioned one specific case in which a potential borrower repeatedly said he didn’t want to provide information about his ethnicity, but was nevertheless entered into Freedom Mortgage’s system as white.

These types of errors happened at least 125 times.

In hundreds of other cases, Freedom Mortgage “incorrectly reported applicants as non-Hispanic white even though the applicants provided requested race or ethnicity information other than non-Hispanic white,” the CFPB document states.

Freedom Mortgage loan officers also took it upon themselves to enter information on applicants’ sex even when those applicants opted not to provide it. They did this because without selecting an applicant’s sex, the system wouldn’t save marital status information. Instead, the software would simply delete a co-applicant’s name and income — a situation that obviously affects the type and size of a loan someone can get.

These problems continued from at least 2014 to 2017, according to the CFPB.

Freedom Mortgage did not immediately respond to Inman’s request for comment.

However, the CFPB describes the company’s errors as “intentional” and a violation of the Home Mortgage Disclosure Act, which requires lenders to report demographic information to regulators.

As a result, Freedom Mortgage has to pay the $1.75 million fine, and according to the CFPB “take steps to improve its compliance management to prevent future violations.”

Email Jim Dalrymple II

How do you stay ahead in a changing market? Inman Connect Las Vegas — featuring 250+ experts from across the industry sharing insight and tactics to navigate threat and seize opportunity in tomorrow’s real estate market. Join more than 4,000 top producers, brokers and industry leaders to network and discover what’s next, July 23-26 at the Aria Resort. Hurry! Tickets are going fast, register today!

Thinking of bringing your team? There are special onsite perks and discounts when you buy tickets together. Contact us to find out more.

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
TOMORROW: Leaders from eXp, Corcoran, RE/MAX, The Agency, and more are speaking virtually at Connect Now. Listen or watch live + receive the replays.Register Now×
Agent Appreciation Sale: Inman Select for only $85.CLAIM OFFER×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription