Newspaper article St Louis Post-Dispatch (MO)

Five Lenders Here Accused of Bias

Newspaper article St Louis Post-Dispatch (MO)

Five Lenders Here Accused of Bias

Article excerpt

A national study released Thursday by consumer advocate Ralph Nader alleges that 49 major mortgage lenders, including five in the St. Louis area, are avoiding making home loans in minority areas.

The report presents "strong evidence" that lenders in 16 cities engaged in racial redlining in 1990 and 1991 in violation of federal fair lending laws, Nader said. The report is based on mortgage data that lenders provided to the Federal Reserve Board.

In metropolitan St. Louis, Nader criticized the lending patterns at two local savings and loans and three mortgage companies.

Those cited were United Postal Savings Association of Warson Woods, Sears Mortgage Corp. of Chicago, Security Financial & Mortgage Corp. in Des Peres, Home Federal Savings Bank of Missouri in west St. Louis County, and Source One Mortgage Services Corp. of Farmington Hills, Mich.

Those lenders excluded minority neighborhoods in their lending or underserved those markets, the study asserts. Those neighborhoods were largely in north St. Louis and East St. Louis.

Officials at United Postal, Sears and Security Financial insisted Thursday that their practices were not discriminatory. Home Federal Chief Executive Bernard Benney declined any comment because he had not yet seen the Nader report. And Source One officials could not be reached.

"We clearly are a major lender, but we don't discriminate in any way and have an impressive track record in fulfilling our affordable-housing role in the community," said Michael Gorman, United Postal's chief executive.

United Postal officials said they have diligently worked with ACORN and other community groups and have met all regulatory standards of the Community Reinvestment Act. ACORN is the Association of Community Organizations for Reform Now.

At Sears Mortgage's headquarters, spokeswoman Sondra Byrnes said: "We have confidence that our lending practices are non-discriminatory as we understand the fair lending law."

Security Financial compliance officer Joyce Long said the company had not discriminated. …

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