The law enforcement arm of the U.S. Treasury Department is investigating the Change Company, a California-based home loan firm that used its community-lender certification from Treasury to create a $6 billion mortgage business, becoming the nation’s largest issuer of exotic mortgages.
Kristin Tahler, an attorney for Change, said in a statement to Barron’s that we “appreciate that the Inspector General’s job is to keep Congress informed of problems and deficiencies relating to the administration of Treasury’s programs and operations.” The Securities and Exchange Commission, which has the power to bring civil actions, has been separately looking into Change, according to former employees who have been questioned by SEC investigators.
Change was certified as a Community Development Financial Institution in 2018 when it pledged to do at least 60% of its lending to Hispanic, Black, or low-income borrowers, or borrowers in designated low-income neighborhoods. Change has said its lending to wealthy individuals doesn’t diminish its commitment to underserved borrowers.