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CFPB v. Draper & Kramer Mortgage Corporation
Filed
January 17, 2025
Jurisdiction
Northern District of Illinois
Plaintiff Firm
Consumer Financial Protection Bureau (CFPB)
Next Milestone
Case closed; CFPB monitoring ceased per no-action letter
Draper & Kramer engaged in redlining by discouraging mortgage applications in majority-Black and Hispanic neighborhoods in Chicago and Boston metro areas (2019-2021), violating Equal Credit Opportunity Act and Consumer Financial Protection Act
$1.5 million civil penalty and 5-year ban from residential mortgage lending; CFPB later issued no-action letter (May 2025) ceasing enforcement after company had already ceased operations and paid penalty
Alleged Redlining Period
2019-2021Draper & Kramer Mortgage Corporation allegedly engages in redlining by discouraging mortgage applications in majority-Black and Hispanic neighborhoods in Chicago and Boston metro areas
CFPB Investigation
2022-2024Consumer Financial Protection Bureau investigates Draper & Kramer's lending patterns and marketing practices in minority neighborhoods
CFPB Files Complaint
January 17, 2025CFPB files complaint in Northern District of Illinois alleging Draper & Kramer violated Equal Credit Opportunity Act and Consumer Financial Protection Act through redlining practices
$1.5M Consent Order
January 24, 2025Court approves consent order with $1.5 million civil penalty and 5-year ban from residential mortgage lending; company had already ceased operations
CFPB No-Action Letter Issued
May 15, 2025CFPB issues no-action letter ceasing monitoring and enforcement after company ceased operations and paid penalty; case effectively closed
Category
Mortgage LendingSettlement
1950000
Freedom Mortgage and Realty Connect violated RESPA Section 8 by exchanging illegal kickbacks: Freedom paid Realty Connect for referrals, and Realty Connect steered homebuyers to Freedom in exchange for payments disguised as 'marketing services'
Category
Mortgage LendingPrice-fixing conspiracy among 29 mortgage lenders using Optimal Blue's pricing platform to coordinate and inflate mortgage interest rates, violating Sherman Antitrust Act Section 1
Category
Mortgage LendingSettlement
6900000
Wells Fargo allegedly violated Truth in Lending Act by failing to properly disclose buydown agreements where sellers paid upfront fees to reduce buyers' interest rates, causing borrowers to pay higher rates than disclosed
Real experiences from homeowners affected by mortgage lending violations.
I applied for a mortgage in 2020 for a home in a predominantly minority neighborhood. Despite having excellent credit and a stable income, I was repeatedly denied or offered rates significantly higher than friends with similar financial profiles in other areas. After seeing the CFPB enforcement actions, I realized I may have been a victim of redlining.
Loan Date: March 2020
When refinancing my home, my loan officer strongly pushed me toward a specific title company and appraiser. I later discovered through court documents that there was an illegal kickback arrangement between my lender and these service providers, which inflated my closing costs by thousands of dollars.
Loan Date: August 2021
I used an online mortgage rate comparison platform in 2022. I thought I was getting competitive rates, but after the Optimal Blue lawsuit came to light, I realized the platform may have been artificially inflating rates through coordination with lenders. My 'best rate' was likely not competitive at all.
Loan Date: November 2022
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