Dozens of loan officers at Freedom Mortgage intentionally submitted inaccurate borrower information that overstated the number of white applicants over a four-year period, the Consumer Financial Protection Bureau alleged in a consent order.

The CFPB said Wednesday that the Mount Laurel, N.J., mortgage lender had agreed to pay a $1.75 million fine to settle allegations that it violated the Home Mortgage Disclosure Act.

The CFPB found that, when mortgage applicants called Freedom to apply for a home loan but did not provide their race or ethnicity, more than 80 different loan officers in seven different call centers selected “non-Hispanic white.”

“Certain loan officers were told by managers or other loan officers that, when applicants did not provide their race or ethnicity, they should select non-Hispanic white (regardless of whether that was accurate),” the CFPB said in the 22-page consent order. “This practice of selecting non-Hispanic white when a customer did not provide race and ethnicity over the phone was not limited to a specific location, loan officer, or time period.”

The CFPB also found that in 300 instances, Freedom loan officers misreported an applicant as “non-Hispanic white” even when the applicant did provide different race or ethnicity information..

By choosing “non-Hispanic white” as a default when applicants did not provide race and ethnicity information, as the CFPB alleged, Freedom potentially undercut its own fair-lending performance by reporting fewer loans to minority borrowers and more to white borrowers.

The CFPB found that about 30% of potential borrowers did not identify their race or ethnicity, based on a review of audio recordings of applications taken by phone from 2014 to mid-2017.

In addition, the CFPB found flaws in how Freedom's electronic system recorded information for Department of Veterans Affairs loans. The system would not allow VA loan applicants' marital status to be saved and would remove a co-applicant’s income if the potential borrower’s gender was not provided.

Even though some observers have criticized the bureau for overlooking HMDA reporting errors, the consent order against Freedom signals that the agency is policing flagrant HMDA violations.

Congress enacted HMDA in 1975 to collect data from mortgage applicants that could be used to root out discrimination based on race, ethnicity and gender.

Freedom — a privately held company — originates more than 50,000 home loans, including refinancings, a year. That makes it among the top 10 lenders and reporters of HMDA data.

Freedom did not immediately respond to a request for comment.