FOR IMMEDIATE RELEASE                                          CR
WEDNESDAY, OCTOBER 18, 1995                        (202) 616-2765
                                               TDD (202) 514-1888


     WASHINGTON, D.C. -- A Columbus mortgage company will
compensate African Americans who paid higher prices for home
mortgage loans than equally qualified whites in the Cleveland area,
under an agreement reached today with the Justice Department.
     The Justice Department first began reviewing the lending
practices of the mortgage company in August 1994.
     Under the settlement, reached with the Justice Department, the
Huntington Mortgage Company will set up a $420,000 compensation
fund for African Americans, implement new monitoring and oversight
systems, and change its policies to ensure uniform pricing without
regard to race.
     In a complaint, filed along with the settlement in U.S.
District Court in Cleveland, the Justice Department alleged the
mortgage company engaged in a pattern of racial discrimination in
the pricing of home mortgage loans in violation of the Fair Housing
Act and the Equal Credit Opportunity Act.  
     Assistant Attorney General for Civil Rights, Deval L. Patrick
claimed that the mortgage company charged African Americans higher
up-front fees -- often called "overages" -- for home mortgage loans
than similarly-situated white borrowers.  The alleged
discriminatory practices occurred during a two-year period ending
in September 1993.  
     Generally, an "overage" refers to certain fees, other than the
interest rate, paid by the borrower in excess of any minimum price
set by a financial institution.  Many loan officers have the
discretion to charge a fee higher than the minimum; any amount
obtained above the minimum price is an "overage".  Loan officers
typically receive some or all of the excess fees that they charge. 
It is not commonly known that such fees are negotiable.
     "Banks must be responsible for overseeing employees who set
the actual prices paid for mortgage loans products," said Patrick. 
"Credit is the lifeblood of economic survival and should never be
jeopardized based on race."
     The Justice Department estimates that approximately 117
African Americans were charged prices higher than the average price
paid by white borrowers.
     Patrick noted that the disparities in the overages did not
occur by chance and cannot be explained by differences in the
borrowers' loan qualifications or other factors unrelated to race. 
Overages, as used by Huntington, are not related to risk.
     The settlement must still be approved by the court.
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