Gateway Funding Diversified Mortgage Services L.P., a Horsham mortgage lender, has settled federal allegations that it charged African Americans and Hispanics higher prices for loans than it did white borrowers, the government said today.

"We are not admitting that we did it," said Bruno J. Pasceri, president and chief executive officer of Gateway. "I can tell you we certainly do not discriminate against anybody. I'm glad it's over."

The allegations by the Federal Trade Commission centered on loans made in 2004 and early 2005. The FTC found that Gateway loan officers charged several thousand African American and Hispanic consumers more - in higher interest rates and higher up-front charges - than was warranted, given the borrowers' credit risk.

The settlement payment was set at $200,000, even though the FTC had alleged $2.9 million in damages to consumers. The FTC said it allowed the lower payment because of Gateway's "inability to pay."

"That's the most we think they can pay at this point," based on a review of sworn financial statements, said Peggy Twohig, associate director of the FTC's division of financial practices. The FTC said it would go back for more money if Gateway's finances turned out to be stronger than portrayed.

Gateway at the time was owned by three limited partners, Regina Lowrie, Paul Catinella and Michael Karp, the last now sole limited partner, according to a court filing. The FTC alleged that certain Gateway loans, both prime and subprime, violated the Equal Credit Opportunity Act.

"It would be a huge undertaking to prove statistically and factually charges like this, and a huge undertaking to defend," said Leonard A. Bernstein, a Reed Smith L.L.P. lawyer who represented Gateway. "They never showed us a sophisticated and detailed analysis that would prove their case."

Asked to respond to Bernstein's statement, Twohig said: "Based on a thorough investigation, including a sophisticated analysis of all loan data, the commission was prepared to prove that this company had discriminated against African American and Hispanic consumers."

Irv Ackelsberg, a consumer attorney with Langer, Grogan & Diver P.C. in Center City, millions of borrowers are paying more than they should be, feeding the nation's foreclosure problem.

"There are a lot of people that are paying high rates not because of their credit record but because of what the sales person has managed to get away with. There can be racial biases in that. There can be gender biases in that. There can be both," he said.