Detroit Homeowners' Fair Housing Suit: Bankster's Reverse Redlining Practices Targeted Blacks With Risky Subprime Home Loans

From a column in The Atlantic Cities:

• In the years leading up to the housing crash, public data suggest that black would-be homeowners in Detroit were 70 percent more likely than white borrowers to receive a risky subprime loan from the now-defunct lender New Century Mortgage Company. This is the central statistic embedded in a 70-page lawsuit filed [last week] in New York against Morgan Stanley, the investment bank that went on to purchase a large share of those loans for repackaging in mortgage-backed securities.
  
  The suit, filed by the ACLU and the National Consumer Law Center, alleges that a kind of "reverse-redlining" became the norm in Detroit. Fifty years ago, discriminatory housing policies prevented many blacks from obtaining home mortgages. Barely five years ago, this suit suggests that a different kind of racial discrimination was taking place in Detroit: Predatory lenders couldn’t approve enough high-risk loans to black borrowers, increasing Morgan Stanley’s profits and disproportionately leaving many of these black homeowners in financial ruin.
  
  In a twist on the ever-expanding legal fallout from the housing crisis, this case – filed on behalf of five Detroit borrowers with the hint of thousands more to come if this turns into a class-action lawsuit – accuses for the first time an investment bank elbow-deep in the housing bubble of violating federal civil rights laws.

For more, see Were Big Banks Guilty of Racial Discrimination in the Housing Crisis?

For the lawsuit, see Adkins, et al. v. Morgan Stanley, et al.