At Risk Homeowners Allege Discrimination

At Risk Homeowners Allege Discrimination

first_img  Print This Post Tagged with: ECBA FHA HUD Lone Star Funds Emery Celli Brinckerhoff & Abady (ECBA) and MFY Legal Services recently filed a federal class action challenging the legality of a Department of Housing and Urban Development (HUD) program, DASP, that sells government-insured FHA home mortgages to private equity funds, leaving these borrowers without insurance-program benefits they are entitled to and putting them at heightened risk of foreclosure, according to a release from ECBA. The lawsuit was filed in the Eastern District of New York.Additionally, the release states that the suit alleges that HUD’s program violates the Fair Housing Act, attributing this to HUD disproportionately selling FHA loans issued to African-American borrowers in New York City for homes in predominantly African American neighborhoods like St. Albans, Queens.According to ECBA, this suit also challenges the actions of Lone Star Funds, the largest purchaser of mortgages sold through the HUD program. The lawsuit alleges that when Lone Star purchases the mortgages from HUD, it “preys on the homeowners”. They allege that the company makes false and misleading statements to the homeowners while refusing to offer homeowners loan modifications it is legally obligated to provide. Instead, it alleges that Lone Star offers homeowners exploitative loan modifications that spell almost certain foreclosure for these borrowers down the line. ECBA also says that the complaint alleges that Lone Star violates the Fair Housing Act because its policies disproportionately impact African-American borrowers and predominantly African-American communities in New York City.It was noted by the New York Times that the sales to private investors had already been under criticism in Washington, thus causing the agency to put in new protections for homeowners whose federally backed mortgages change ownership.Despite the new addendum, more than 100,000 mortgages already sold by HUD in a series of auctions will not qualify for the new protections. The controversy over mortgage sales is something the housing agency has faced over its Federal Housing Administration mortgage program for quite some time now. By selling the mortgages to the highest bidder, the agency can bolster its insurance fund that had been eroded by the flood of foreclosures in the immediate aftermath of the housing crisis and according to the New York Times, the more the insurance fund increases, the more mortgages to lower-income borrowers the department can backstop. Home / Daily Dose / At Risk Homeowners Allege Discrimination Sign up for DS News Daily ECBA FHA HUD Lone Star Funds 2016-08-16 Kendall Baer Share Save About Author: Kendall Baer At Risk Homeowners Allege Discrimination Kendall Baer is a Baylor University graduate with a degree in news editorial journalism and a minor in marketing. She is fluent in both English and Italian, and studied abroad in Florence, Italy. Apart from her work as a journalist, she has also managed professional associations such as Association of Corporate Counsel, Commercial Real Estate Women, American Immigration Lawyers Association, and Project Management Institute for Association Management Consultants in Houston, Texas. Born and raised in Texas, Baer now works as the online editor for DS News. Demand Propels Home Prices Upward 2 days ago in Daily Dose, Featured, Government, News Demand Propels Home Prices Upward 2 days ago The Best Markets For Residential Property Investors 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago The Best Markets For Residential Property Investors 2 days ago Subscribe Servicers Navigate the Post-Pandemic World 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago August 16, 2016 1,115 Views Data Provider Black Knight to Acquire Top of Mind 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago The Week Ahead: Nearing the Forbearance Exit 2 days ago Related Articles Previous: CFPB Finds Support for Arbitration Clause Ban Next: ATTOM Data Solutions Hires New Chief Technology Officerlast_img

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