Following CFPB redlining lawsuit, Townstone Financial files motion to dismiss

HousingWire Daily

In today’s Daily Download episode, HousingWire discusses a motion filed by Townstone Financial to dismiss a lawsuit the Consumer Financial Protection Bureau filed against the company in July.

For some background on the story, here’s a summary of the article:

On Monday, Townstone Financial Inc., a Chicago-based nonbank retail mortgage lender, filed a motion to dismiss a lawsuit the Consumer Financial Protection Bureau filed against the company in July.

The July 15 complaint alleged that Townstone violated the Equal Credit Opportunity Act (ECOA) and Regulation B by engaging in discriminatory mortgage-lending practices and that those violations also constituted violations of the Consumer Financial Protection Act.

Townstone moved to dismiss the lawsuit based on expressive action that the CFPB attempted to expand the reach of the ECOA to “prospective applicants,” which the company said is not regulated under ECOA.

The CFPB’s suit alleges that, from 2014 through 2017, Townstone engaged in practices that illegally discouraged prospective African-American applicants from applying to Townstone for mortgage loans as well as practices that discouraged prospective applicants living in African-American neighborhoods in the Chicago MSA from applying to Townstone for mortgage loans.

Following the main story, HousingWire also covers a report from the Mortgage Bankers Association that indicates the U.S. forbearance rate fell slightly to 5.9% last week and an announcement from First American that it has agreed to acquire sub-servicer ServiceMac.

The Daily Download examines the most compelling articles reported from the HousingWire newsroom. Each afternoon, we provide our listeners with a deeper look into the stories coming across our newsroom that are helping Move Markets Forward. Hosted by the HW team and produced by Alcynna Lloyd and Victoria Wickham.

HousingWire articles covered in this episode:

2020-10-27 7 min

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