Brooklyn Federal Judge Allows Alleged Race Based Predatory Lending Suit To Go Forward

(original post 8-24-07)
Law.com reports:

• "A series of federal lawsuits filed by eight black first-time homebuyers alleging that New York's United Homes targeted minorities as part of a conspiracy to sell over-valued, broken-down homes financed with predatory loans will go forward following a federal judge's rejection of the defendants' motions to dismiss."

• "As summarized by [Federal District Court Judge Raymond J.] Dearie, "Plaintiffs claim that defendants were part of a fraudulent property-flipping scheme. They allege that United Homes and its affiliated companies ... bought damaged properties at foreclosure auctions or estate sales[,] performed some cosmetic repairs and, shortly thereafter, sold the properties, often at double the purchase price." The buyers claimed that United Homes conspired with appraisers, mortgage lenders and lawyers "who facilitated the sales by preparing significantly overvalued appraisals and originating loans and mortgages that were correspondingly inflated." They claimed violations of the Fair Housing Act and other anti-discrimination laws, as well as a number of state-law violations."

Representing the plaintiff are the law firms Scarola Ellis LLP, of New York City, South Brooklyn Legal Services - Brooklyn, NY, and AARP Foundation Litigation, Washington, D.C.

For more, see Bias Claims Proceed Against Seller of 'Damaged' Homes.

For copy of lawsuit, see Barkley vs. United Homes, et al.

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