Skip to main content

Posts

Showing posts from 2012

ACLU suit accuses Morgan Stanley of fair housing discrimination:

The Wall Street Journal reports that American Civil Liberties Union (ACLU) filed suit on behalf of Michigan Legal Services, a non-profit community advocacy group, and five individual Detroit residents against Morgan Stanley. The ACLU alleges that Morgan Stanley provided critical funding to New Century Financial Corp., a now-defunct subprime lender, and encouraged lending tactics that raised the risks associated with the loans. New Century was the second biggest U.S. subprime mortgage lender until its collapse in April 2007. The ACLU accuses Morgan Stanley of discriminating against black homeowners and violating federal civil rights laws by providing incentives to subprime mortgage lenders to originate mortgages that were destined for foreclosure. The ACLU is calling it the first case to connect racial discrimination to mortgage securitization, in which loans are bundled and sold to institutional investors. It is also the first case where homeowners are suing an investment bank directl

Round and Round the “Steering” Wheel Goes for Allentown, Pennsylvania

As we have reported previously, discrimination is alive and well in our communities, as the community of Allentown, Pennsylvania, discovered. The Morning Call, a local newspaper, reports that a housing “sting” operation revealed that real estate agents treated white and minority home buyers differently in 73 percent of cases, steering white buyers to the suburbs and minorities to the city, even when they each had the same job history and income. These actions, known as “steering”, are illegal under the federal fair housing act. County officials state that this practice could have damaged Allentown's economic development for decades, draining income and diversity from city neighborhoods. The Community Action Committee of the Lehigh Valley, with Allentown's help, organized the fair housing test after years of hearing anecdotes of housing discrimination, said Alan Jennings, executive director of the CACLV. "Next time, we're not going to hold a press conference,"

SunTrust $21Million Settlement with DOJ

This past Thursday, Businessweek covered a massive settlement in a federal lawsuit alleging racial discrimination in SunTrust’s lending practices. The suit, filed by the US DOJ, was filed in the U.S. District Court in Richmond, VA, alleging more than 20,000 African-American and Hispanic borrowers were charged more than similarly-situated and qualified non-Hispanic white borrowers, between 2005 and 2009. The suit alleged that minority borrowers in 75 geographic markets from Virginia Beach, VA to San Francisco, CA, paid more in loan fees, or were charged higher interest rates based solely on race or national origin. A consent order filed with the complaint says SunTrust denies any wrongdoing, but agreed to the settlement. "SunTrust strongly believes in the principles of fair lending," company spokesman Mike McCoy in Atlanta said. "We are pleased to have reached a settlement and put this matter behind us." Settlements like this come as a surprise, considering the

Housing Discrimination Alive and Well in the 21st Century

Some people are in denial that in this day and age, discrimination simply does not exist anymore. Taking things at face value, one can see how an individual may be lulled into a false sense of security – legislation designed to protect minorities, affirmative action, et cetera, exist for the advancement of colored peoples in this nation. However, according to a recent study by the Consumer Action group , all is not fair in home and housing. Consumer Action contacted 5,000 community organizations across the country, compiling information from 549 respondents, who reported “serious issues with housing discrimination.” The survey shows that immigrants, the disabled, and families with children aren’t welcome in some places, and that “immigrants face the greatest hardships in finding legal recourse for housing discrimination.” One reason, Consumer Action claims, may be cultural barriers. Non-English-speaking minorities could be left out in the cold by unfair housing practices. The study

Counting Down to 2015: Banks Looking to the Future to Bring Back the Past

The National Mortgage Settlement was enacted not just to punish the wrong-doing of the nation’s five biggest lenders, but to create new safeguards to regulate the home buyer’s market. The deal involved Wells Fargo, Bank of America, Citibank, JP Morgan Chase, and Ally Financial to pay an unprecedented $24 billion to fund government programs like the Home Affordable Mortgage Program, or HAMP. While the effectiveness of these government programs funded by the settlement is being debated, the policies put in place by the settlement are due to expire in 2015. The Huffington Post reports that legal agreements among the banks, and the states and federal government hold for only three-and-a-half years. Good news for the banks. Bad news continues for those facing foreclosure. But there’s a way around the expiration of the Federal mandates. California Attorney General Kamala Harris, for example, is attempting to make permanent some of the National Mortgage Settlement's most important &quo

St. Paul Withdraws From US Supreme Court Case Potentially Pivotal To Fair Housing Actions

Last November, we reported on Gallagher v. Magner, 619 F.3d 823, 829 (8th Cir. 2010), and its potentially lethal effect on a cornerstone of Fair Housing actions: disparate impact and the application of the McDonnell-Douglas “burden-shifting” analysis. However, on Friday, February 10, 2012, the parties withdrew the case from the US Supreme Court just a few weeks before the scheduled argument of February 29. The US Supreme Court granted the withdrawal. The parties in the case were the City of St. Paul, Minnesota (namely, the Department of Neighborhood Housing and Property Improvement [DNHPI]), and property owners who allege that their homes were targeted by housing code enforcement personnel and their draconian treatment of so-called violations of the housing code. The Plaintiffs brought suit against the City of St. Paul and the DNHPI alleging that the city’s enforcement of its housing code had a disparate impact on minority home and property owners, “whose customers were mainly indiv

Legislators Pass Bills to Expedite Short Sale Process

On January 13, Illinois Senate Bill 1259 was signed by Governor Pat Quinn, requiring banks and lending institutions to respond to a short sale offer by a homeowner within 90 days. The bill also gives courts the authority to hold banks accountable to the 90 day response provision. Previously, the court had no jurisdiction over banks, allowing them unprecedented control over the foreclosure process. "Families are not losing their homes to foreclosure because they are dead beats refusing to pay their mortgages," Illinois State Senator Silverstein said on a news release published on his website . "They are people who are struggling to get through the worst economic downturn since the Great Depression. Unfortunately, we are seeing banks stalling the process of a short sale in order to push through foreclosure proceedings, giving families limited options to get out of their mortgage debt." In 2010, the number of new short sales late that year had i ncreased nearly 83 p