Dec 11

3 Lending Discrimination Lawsuits

Fair housing lawsuits are one tool for addressing illegal discrimination in the real estate and mortgage credit industries.

Fair housing lawsuits are one tool for addressing illegal discrimination in the real estate and mortgage credit industries, though the bar is high for determining liability. Cases alleging discrimination in lending practices were highlighted in NAR’s 2019 Legal Pulse report. Here’s a summary of three notable cases:

1. The city of Miami Gardens, Fla., sued mortgage lender Wells Fargo alleging that it had engaged in discriminatory or predatory lending in violation of the Fair Housing Act between 2004 and 2008, citing its use of redlining and reverse redlining tactics. The city asserted that Wells Fargo denied credit to particular neighborhoods based on race (redlining) and of “flooding a minority community with exploitative loan products” (reverse redlining).

Result: Miami Gardens was unable to prove that it suffered an injury as a result of alleged redlining and reverse redlining by Wells Fargo. The court determined that “the undisputed evidence confirmed that none of the 153 loans originated by Wells Fargo [within the limitation period] foreclosed.” Thus, the city could not have suffered an injury as a result of any of these loans.

2. The U.S. Department of Justice filed a civil complaint against First Merchants Bank alleging violations of the Fair Housing Act and the Equal Credit Opportunity Act committed between 2011 and 2017. The suit alleged that the bank engaged in unlawful redlining by not providing mortgage credit services to majority Black areas in Marion County, Ind. The complaint further alleged that the bank failed to have any branch locations in majority Black areas, refused to market in majority Black counties, and had a disproportionately low number of loan applications and loan originations from majority Black neighborhoods.

Result: The parties filed a settlement agreement. In it, the bank denied the allegations but agreed to take all actions necessary to ensure that it offers and provides all persons with an equal opportunity to apply for and obtain credit, retains an independent third-party consultant to assess its fair lending risk management program, maintains a fair lending monitoring program, and provides training to all employees.

3. Prince George’s County and Montgomery County, Md., filed suit against Wells Fargo for alleged predatory and discriminatory residential mortgage lending, servicing, and foreclosure practices in violation of the Fair Housing Act. In the complaint, the counties alleged five categories of injuries: foreclosure processing costs; the increased cost of municipal services; economic injuries to the counties’ tax bases; lost municipal income; and non-economic injuries.

Result: The court held that the counties sufficiently pleaded claims associated with foreclosure processing costs but found the alleged non-economic injuries were too far removed from the alleged discriminatory conduct to have been plausibly caused by Wells Fargo.

©National Association of REALTORS®
Reprinted with permission

admin

For all of your Real Estate needs, place yourself in the competent hands of a career Realtor who is a Philadelphia native and Delaware County resident. Skilled, smart and enthusiastic about his work and his life, Anthony DiDonato has the appealing combination of business sense and people skills gives him an edge in an industry that demands both.

Educated at Drexel University with a dual major in accounting and finance and minors in management and psychology Anthony DiDonato offers over 25 years of experience in the real estate industry. He has been a real estate investor since 1985 and a member of H.A.P.C.O. (Landlord Association). He became a licensed Realtor in 1992 and a member of the Local, Pennsylvania and National Associations of Realtors. Anthony DiDonato is also a member of the Computerized Multiple Listings, (MLS) and Internet Marketing Programs. In 1997 Anthony DiDonato became Century 21 All-Elite, Inc. Corporate Secretary.

Anthony DiDonato believes in taking his profession to the highest level of quality service. He is known for finding that “perfect” property in Philadelphia, Delaware County, Chester County, Montgomery County and surrounding areas in Pennsylvania for his buyers and helping his sellers prepare their properties so they sell quickly and efficiently.

When it comes time to negotiate the terms of a contract, Anthony DiDonato has the knowledge, experience, and professionalism applied to meeting – or exceeding – his clients’ expectations. His service to his clients is second to none. His honesty and integrity have been his claim to fame.

For Superior Real Estate Representation in the Delaware Valley, Philadelphia, Delaware County, Chester County, Montgomery County and surrounding areas in Pennsylvania… call Anthony DiDonato.