Mar 20, 2009

Mortgage Brokers and Discretionary Pricing

In Taylor v. Accredited Home Lenders, 580 F.Supp.2d 1062 (S.D. Cal. 2008) the Plaintiffs alleged a facially neutral "discretionary pricing policy" had a disparate impact on African American borrowers. At issue was whether the injury suffered was the result of a single incident violation which would have placed the Plaintiff's complaint beyond the two year statute of limitations or whether the injury was the result of a continuing violation.

42 U.S.C. Sec.3613(1)A) requires that actions must be commenced "no later than 2 years after the occurrence or the termination of an alleged discriminatory housing practice." The court agreed with the Plaintiffs and held that the issuance of each mortgage statement containing the inflated amount due constituted a new violation and that each payment of that inflated figure was a new violation. The court rejected the defendant's single incident theory that "the violation occurred and terminated when the loan closed." Id. at 1065.

The court relies on Havens Realty Corp. v. Coleman, 455 U.S.363(1982) and its explanation of the continuing violation doctrine.

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