Mortgage Lender Lawsuit Alleges Discrimination
A major consumer advocate announced this week that it is filing a lawsuit against 12 mortgage providers, alleging racial bias in home loan terms.
The NAACP will sue a dozen home mortgage lenders, claiming the 12 companies discriminated against blacks by steering them into higher-interest, bad credit home loans.
At the same time, the legal action claims, the mortgage providers named in the suit where giving more favorable home loan terms to white borrowers.
The lawsuit, which seeks class-action status, was filed in U.S. District Court in Los Angeles.
It demands an official court order barring the mortgage company defendants in question from discriminating against blacks, and compelling them to comply with fair housing and credit laws.
Among the defendants named in the suit are Ameriquest Mortgage, Citigroup, HSBC Finance and Washington Mutual.
Ameriquest, Citigroup and HSBC defended their mortgage loan practices as fair. Washington Mutual declined comment, saying it needed more time to review the lawsuit before remarking publicly on the matter.
In the lawsuit, the NAACP contends that each home loan lender has engaged in “institutionalized, systematic racism” towards black homeowners who received subprime loans from lenders in 2004.
It says black borrowers were 30 percent more likely to get higher mortgage rates than white borrowers with the same financial qualifications.
SOURCE: San Jose Mercury-News