The Fair Housing and Fair Lending Project - The Lawyers' Committee for Civil Rights Under Law - News Feed

Lawyers' Committee Files Amicus Brief Supporting Disparate Impact Claims Under the Fair Housing Act

Tue, 31 Jan 2012 00:00:00 -0600

On January 30, 2012 the Lawyers' Committee for Civil Rights Under Law, all eight of its affiliates and 16 other civil rights organizations filed an amicus curiae brief in the Supreme Court of the United States in the case of Magner v. Gallagher. The case presents two important questions: whether disparate impact claims are cognizable under the Fair Housing Act (FHA) and, if so, what is the proper mode of analysis under such a claim. The importance of these issues to fair housing enforcement makes this the most important fair housing case heard by the Supreme Court in decades.

The Lawyers’ Committee brief argues that the text and legislative history of the Fair Housing Act supports the conclusion, uniformly accepted in the all courts of appeals for nearly four decades that the FHA authorizes pursuit of disparate-impact claims. Moreover, the brief argues that the longstanding administrative interpretation adopted by the Department of Housing and Urban Development reflects its decision to interpret the Act as authorizing disparate-impact claims and its understanding that a narrower interpretation would prevent accomplishment of Congress’ goals, a decision to which the Court should give deference. Furthermore, the brief argues that this interpretation would not conflict with the constitutional guarantee of equal protection of the laws.

To read the amicus brief, click here.

Lawyers' Committee Submits Support Letter for HUD Proposed Regulation Concerning Disparate Impact Claims Under Fair Housing Act

Wed, 18 Jan 2012 00:00:00 -0600

On January 17, 2012 the Lawyers’ Committee, six of its affiliates and eighteen other civil rights organizations submitted a comment letter in full support of the Department of Housing and Urban Development’s proposed regulation establishing that violations of the Fair Housing Act may be proved through a disparate impact analysis.

HUD’s proposed regulation is a very important and necessary step in ensuring that the nation’s housing is available to all, regardless of protected class status. It formalizes the long and consistent interpretation of the Act by HUD which has repeatedly determined that disparate impact claims are cognizable under the anti-discrimination provisions of the Act. This interpretation is consistent with the uniform interpretation of the Act by all federal courts of appeals which have held unanimously, for almost forty years, that liability under the Act may be established based on a showing that a neutral policy or practice either has a disparate impact on a protected group or creates, perpetuates, or increases segregation. The Supreme Court is now considering a case raising this important issue and HUD’s formalizing its long and consistent interpretation of the Act strengthens the argument that the Court should follow the consistent determination of HUD and all courts of appeals. “This regulation will foster the goals of the Fair Housing Act and is important to formalizing the consistent and uniform understanding of the standard of proof for proving violations of the Act,” said the Fair Housing and Fair Lending Project Director Joe Rich.

A copy of the comment letter can be found here.

About the Lawyers' Committee

The Lawyers' Committee for Civil Rights Under Law (LCCRUL), a nonpartisan, nonprofit organization, was formed in 1963 at the request of President John F. Kennedy to involve the private bar in providing legal services to address racial discrimination. The principal mission of the Lawyers' Committee is to secure, through the rule of law, equal justice under law, particularly in the areas of fair housing and fair lending, community development, employment discrimination, voting, education and environmental justice. For more information about the LCCRUL, visit www.lawyerscommittee.org.

Lawyers' Committee Praises the Department of Justice's Settlement of Fair Lending Case against Countrywide Financial Corporation

Fri, 23 Dec 2011 00:00:00 -0600

The Lawyers' Committee applauds the Department of Justice's filing on December 21, 2011 of the largest residential fair lending settlement in history to resolve allegations by the Department that Countrywide Financial Corporation and its subsidiaries engaged in a widespread pattern or practice of discrimination against qualified African-American and Hispanic borrowers in their mortgage lending from 2004 through 2008. Countrywide was acquired by the Bank of America after this period.

The settlement provides $335 million in compensation for victims of Countrywide's discrimination during a period when Countrywide originated millions of residential mortgage loans as one of the nation's largest single-family mortgage lenders. The complaint alleges that Countrywide systematically and intentionally engaged in unfair lending policies and practices which also had a disparate impact on African American and Hispanic customers in its loan pricing practices in violation of both the Fair Housing Act and the Equal Credit Opportunity Act. Through these discriminatory policies and practices, Countrywide charged more than 200,000 African-American and Hispanic borrowers higher fees and interest rates than non-Hispanic white borrowers in both its retail and wholesale lending. Moreover, the complaint alleged that these policies and practices resulted in steering thousands of African-American and Hispanic borrowers into subprime mortgages when non-Hispanic white borrowers with similar credit profiles received prime loans.

The Department's complaint also alleged that Countrywide violated the Equal Credit Opportunity Act by discriminating on the basis of marital status against non-applicant spouses of borrowers by encouraging them to sign away their home ownership rights.

"The filing of this case and the record setting settlement is a very important step forward both for fair lending enforcement and for addressing the discriminatory lending practices which was a prime factor in the country's ongoing foreclosure crisis," said the Fair Housing and Fair Lending Project Director Joe Rich. "Minority borrowers have been the victims of these types of discriminatory practices and the foreclosure crisis which grew out of these practices has resulted in the greatest loss of wealth in minority communities in the history of this country."

To read the Department of Justice's press release click here.

About the Lawyers' Committee

Lawyers' Committee and Greater New Orleans Fair Housing Action Center Release "People's Analysis of Impediments (AI) to Fair Housing for New Orleans"

Wed, 21 Dec 2011 00:00:00 -0600

NEW ORLEANS, LA - On December 21, 2011, the Greater New Orleans Fair Housing Action Center (GNOFHAC) and the Lawyers’ Committee for Civil Rights Under Law released a report entitled “People's Analysis of Impediments (AI) to Fair Housing for New Orleans .”

The report is the result of a collaboration among the Lawyers' Committee, GNOFHAC, and more than a dozen local, state, and national service providers, affordable housing developers, and advocates. The "People's AI" provides recommendations, based on best practices and guidance from the U.S. Department of Housing and Urban Development (HUD), on how the City of New Orleans can draft a thorough and effective Analysis of Impediments to Fair Housing Choice, as required by the Fair Housing Act. It also provides a thorough critique of the City's current Analysis of Impediments and suggests steps to improve it.

In April of this year, GNOFHAC and the Lawyers' Committee had released a handbook entitled "Strategies to Affirmatively Further Fair Housing: Proposals for the City of New Orleans Comprehensive Zoning Ordinance (CZO) and Beyond." The handbook recommended strategies the City Planning Commission could adopt in the new zoning ordinance to overcome impediments to fair housing choice.

In addition to promoting integration and healthier communities, understanding and overcoming barriers to housing choice and drafting an effective AI would help the city fulfill its duty to affirmatively further fair housing, as required with federal funds such as Community Development Block Grants.

The "People's AI" is the latest product of an innovative partnership between GNOFHAC and the Lawyers' Committee, which, among other things, enforces fair housing laws throughout the country and provides legal assistance to nonprofit organizations, particularly in the Gulf Coast region.

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The Lawyers’ Committee for Civil Rights Under Law, a nonpartisan, nonprofit organization, was formed in 1963 at the request of President John F. Kennedy to involve the private bar in providing legal services to address racial discrimination. The principal mission of the Lawyers’ Committee is to secure, through the rule of law, equal justice under law, particularly in the areas of fair housing and fair lending, community development, employment; voting; education and environmental justice.

The Greater New Orleans Fair Housing Action Center (GNOFHAC) is a private nonprofit organization. GNOFHAC is dedicated to eliminating housing discrimination and furthering equal housing opportunities through education, outreach, advocacy, and enforcement of fair housing laws across the metro New Orleans and Baton Rouge areas. The activities described in this release were privately funded.

Advocates Submit Comments on FTA's Environmental Justice and Title VI Circulars

Wed, 07 Dec 2011 00:00:00 -0600

The Lawyers' Committee and diverse national, statewide, and local organizations and scholars that work on transportation justice have submitted public comments to the Federal Transit Administration (FTA) on the proposed new Circulars on Title VI and Environmental Justice.

To read the comment letter, click here.

Feds target HAMP scammers bilking owners

Tue, 06 Dec 2011 00:00:00 -0600

"Once again, mortgage servicers are hitting ordinary New York homeowners where it hurts.

The latest evidence is widespread scams tied to the Home Affordable Modification Program, or HAMP, which was supposed to help up to 4 million troubled borrowers avoid foreclosure.

Servicers, which manage loans day to day, have collected a cool $666 million from the government for participating in HAMP. Too bad servicers make the HAMP application process so difficult for the ordinary homeowner, they’ve opened the door to bogus “experts” who claim to help — for a big fee. [...]"

To read the full article at NY Post, click here.

Lawyers' Committee Applauds HUD's Release of Proposed Regulation Concerning Disparate Impact Claims under the Fair Housing Act

Fri, 18 Nov 2011 00:00:00 -0600

CONTACT:
Stacie B. Royster
202-662-8317, office
202-445-6101, mobile
sroyster@lawyerscommittee.org

WASHINGTON, D.C., November 17, 2011 – The Lawyers’ Committee for Civil Rights Under Law released the statement below following the November 16, 2011 issuance of a proposed regulation by HUD concerning disparate impact claims:

On November 16, 2011, the United States Department of Housing and Urban Development (HUD) published a proposed regulation entitled “Implementation of the Fair Housing Act’s Disparate Impact Standard.” “The Lawyers’ Committee for Civil Rights Under Law applauds today’s publication for providing a definitive interpretation that violations of the Fair Housing Act may be proved through a disparate impact analysis as well as by proof of intentional discrimination,” said Fair Housing and Fair Lending Project Director Joe Rich. “The disparate impact (or discriminatory effect) theory is firmly established by Fair Housing Act case law. Starting 38 years ago, every appellate court that has addressed this issue, without exception, has found that the Fair Housing Act provides for disparate impact claims. Adding HUD’s interpretation through this regulation to this long line of court precedent clarifies and strengthens the ability of both the private and public sectors to vigorously enforce the Act.”

“The importance of this regulation cannot be overstated,” said Public Policy Director Tanya Clay House. “Courts have long recognized that focusing only on discriminatory intent often permits racial discrimination to go unpunished in the absence of evidence of overt bigotry. Blatant bigoted behavior has been reduced over the years because those who discriminate act more discreetly, making evidence of discriminatory intent harder to find. But this does not mean that racial discrimination has disappeared and this is a key reason why courts have consistently found discrimination can be proved through a discriminatory impact standard that does not require a finding of intent to discriminate.”

The Lawyers’ Committee has a long history of combating housing discrimination and residential segregation and has consistently relied on the disparate impact standard in its housing litigation and advocated for its applicability to fair housing and fair lending claims. Since the Fair Housing Act became law in 1968, residential segregation and isolation of African Americans have continued to be an intractable feature of housing patterns in the United States and, sadly, this segregation did not occur by accident. Rather, the segregation was a product of a complex web of discriminatory policies and actions made since the beginning of the 20th century. Residential segregation has a pernicious impact not just on the ability of minorities to find decent housing, but also on other basic rights such equal educational opportunities, good job opportunities, and a healthy and safe environment in which to live. A primary purpose of the Act was to address this entrenched residential segregation and the disparate impact standard has been critically important to enforcement efforts to combat continued segregation.

In recent years, the Lawyers’ Committee has filed three fair housing cases challenging zoning decisions which blocked the ability of minorities to find affordable housing in high opportunity communities and perpetuated housing segregation. Disparate impact claims are central to each of these cases. Among these cases is an ongoing lawsuit against St. Bernard Parish, which arose in the wake of Hurricane Katrina. St. Bernard Parish blocked affordable housing which would have provided multifamily rental housing in the Parish so badly needed by African American homeowners and renters whose homes had been destroyed in neighboring New Orleans. The district court found a violation of the Fair Housing Act based on the disparate impact claim.

Because of the importance of this standard of proof to vigorous enforcement of the Act, the Lawyers’ Committee has also long advocated for such a regulation and for such a standard in friend of the court briefs in courts of appeal. “The publication of this regulation is critically important at this time,” added Rich. “As recently as last week the Supreme Court agreed to hear a case which will examine whether the consistent interpretation of all courts of appeal that violations of the Fair Housing Act may be proved through a disparate impact analysis is correct. Having HUD, the agency primarily responsible for implementation of the Fair Housing Act, adopt a regulation which confirms that violations of the Fair Housing Act may be proved through disparate impact claims will strengthen efforts in this case to defend the consistent interpretation of all courts of appeals.”

There will be a 60-day period to provide written comments addressing the proposed regulation. The Lawyers’ Committee fully supports this proposed regulation’s imprimatur of disparate impact claims. We will closely examine the substance of the regulation and offer comments concerning the details of the standard proposed. We look forward to expedited consideration of all comments by HUD and issuance of a final regulation as soon as possible.

"The Lawyers' Committee is very pleased to see HUD exercise leadership on this important issue. The publication of today's proposed regulation will help clarify standards of proof under the Fair Housing Act and most importantly strengthen the ability of government agencies and private fair housing advocates to achieve the goals and promise of the Act," Ms. Clay House added. "We encourage civic leaders and citizens to recommit to the goal of fair housing and residential desegregation because this is a goal central to equal opportunity not only in housing, but also in education, employment, and overall quality of life."

About the Lawyers' Committee

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WSJ: "Mortgage Scams in a Weak Housing Market"

Mon, 14 Nov 2011 00:00:00 -0600

Lawyers' Committee Senior Counsel Yolanda McGill is quoted in the Wall Street Journal article on "Mortgage Scams in a Weak Housing Market."

Check out the article here or above and read some of our tips for avoiding foreclosure rescue scams below:

HOW TO SPOT A FORECLOSURE RESCUE SCAM

A company/person asks for a fee in advance to work with your lender to modify, refinance or reinstate your mortgage.
A company/person guarantees they can stop a foreclosure or get your loan modified.
A company/person advises you to stop paying your mortgage company and pay them instead.
A company pressures you to sign over the deed to your home or sign any paperwork that you haven't had a chance to read, and you don't fully understand.
A company claims to offer "government-approved" or "official government" loan modifications.
A company/person you don’t know asks you to release personal financial information online or over the phone.

HOW TO REPORT A FORECLOSURE RESCUE SCAM

CALL 1-888-995-HOPE (4673) OR VISIT www.preventloanscams.org.

LAWYERS' COMMITTEE AND CIVIL RIGHTS PARTNERS FILED AMICUS BRIEF IN SUPREME COURT CASE RAISING IMPORTANT ACCESS TO COURT ISSUE

Wed, 19 Oct 2011 00:00:00 -0500

On October 18, 2011, the Lawyers’ Committee, along with the NAACP Legal Defense Fund, the National Fair Housing Alliance and the Washington Lawyers Committee for Civil Rights and Urban Affairs submitted an amicus curiae brief in the Supreme Court in First America Financial Corp. v. Edwards (No. 10-708). This brief was filed in support of the respondent (the plaintiff in the original lawsuit), and argues that Congress has broad rights to give private citizens access to the courts. The case involves a homebuyer who sued a title insurance company under a federal statute that aims to curtail kickbacks and collusion between providers of real estate settlement services (such as title insurance) and settlement or real estate agents. Because the buyer could not show that she had suffered direct financial harm from this transaction, the defendant title insurance company claimed that she had not suffered the “injury in fact” that is constitutionally required for a party to have “standing” to sue in federal court.

This question has important implications for enforcement of civil rights laws, particularly in the fair housing area, where testers can sue an agent or owner under the Fair Housing Act if they are lied to about the availability of housing on the basis of race, even if they have no intention of buying a house. The Supreme Court has held that such testers have standing, largely because through the Fair Housing Act Congress created a right to truthful information about housing, and infringement of that right is an injury. The Committee seeks a ruling for the Edwars respondents in order to maintain the power of Congress to create such rights as a basis for standing in housing and other areas.

To read brief, please click here.

Law and Order: A group of pro bono lawyers are pursuing fraud cases

Fri, 30 Sep 2011 00:00:00 -0500

The October 2011 issue of American Lawyer includes a "Bartalk" spotlight on the great work of the Lawyers' Committee's Loan Modification Scam Prevention Network and the cases it has brought with pro bono partners Davis Polk in New York.

Head over to the American Lawyer website to read the piece.

Borrowers win $68G award against loan modifier

Thu, 29 Sep 2011 00:00:00 -0500

Via Newsday:

"Nine borrowers have won a $68,000 judgment against a now-defunct loan modification company that illegally charged upfront fees -- and did little to lower mortgage payments.

State Supreme Court Justice John Galasson in Mineola trebled damages against Save My Home, which operated nationwide from Garden City and went by other names. Its employees told on-time borrowers to default, took money from those ineligible for federal loan modifications, and guaranteed lower payments, the suit said.

"I gave them $3,000 . . . and they didn't call me when I called," said Flushing taxi driver Mohammed Shukran, who took Save My Home's advice to default. "For one and a half years they were playing games with us."

The ruling is the latest victory in three unusual lawsuits filed this year by the nonprofit Lawyers' Committee for Civil Rights Under Law, a Washington, D.C.-based nonprofit, and Manhattan-based Davis Polk & Wardwell. It's a pro bono effort against Save My Home, its successor, Express Home Solutions, and another closed loan modification company, Homesafe America of Levittown, its successor businesses and employees. Court papers said the companies used the same tactics to get clients, then avoid them.

These suits are the first of several planned by the Lawyers' Committee[...]"

To read the full article, click here.

MCJ's Reilly Morse Contributes to Latest Brookings Publication on the Aftermath of Katrina

Tue, 06 Sep 2011 00:00:00 -0500

With the recent passing of the sixth anniversary of Hurricane Katrina, The Brookings Institution published the book, “Resilience and Opportunity: Lessons from the Gulf Coast after Katrina and Rita,” highlighting strategies used to recover from the devastating tragedy and offering critical analysis of the lessons learned. The book includes a chapter by one of the Lawyers’ Committee’s close partners, Reilly Morse of the Mississippi Center for Justice (MCJ), entitled “Come On in This House: Advancing Social Equity in Post-Katrina Mississippi.” Morse’s chapter deals with recovery along the sometimes forgotten coast of Mississippi, particularly with regards to the social injustices manifested in attempts at redevelopment.

In the years following the hurricane, many Mississippi residents were left with their housing recovery needs unmet. In 2008, the Lawyers’ Committee, MCJ and the law firm of Mintz Levin filed a complaint alleging that HUD had violated federal funding guidelines when the agency approved the State of Mississippi’s plan to divert $570 million in Disaster Recovery Community Development Block Grant (CDBG) funds from programs addressing the housing needs of low- and moderate-income survivors of Katrina to finance a major expansion of the commercial Port of Gulfport. In November 2010, the parties in the case, Mississippi State Conference NAACP v. HUD, settled and $132 million was reallocated back to essential housing rehabilitation along the Mississippi coast.

One of the key lessons learned from Katrina disaster recovery was the prominent of role national and local partnerships in the rebuilding of the Gulf Coast. Utilizing litigation, transactional support and policy advocacy, the Lawyers’ Committee remains committed to a just housing recovery for all affected by Katrina.

Click here to read Reilly Morse’s chapter, “Come On in This House: Advancing Social Equity in Post-Katrina Mississippi,” from Resilience and Opportunity: Lessons from the Gulf Coast after Katrina and Rita.

Click here to read our article in the Clearinghouse Review “Justice Crosses the Tracks: Settlement Brings Katrina Funds to Low- Income Mississippi Residents,” a detailed account of the case Mississippi State Conference NAACP v. HUD.

Barbara Arnwine Speaks as a Panelist at EPA's Environmental Justice Conference in Detroit, Discusses Agency Failure to Enforce Title VI

Thu, 01 Sep 2011 00:00:00 -0500

Activists and officials gathered in Detroit for four days this August to discuss and share tools for addressing the environmental justice concerns in many communities across the nation. The conference was open to the public and about 500 stakeholders attended. Sessions included trainings on how communities could understand environmental laws, leverage private funding, and engage in environmental assessments.

Lawyers’ Committee Executive Director Barbara Arnwine participated on a panel called “Tools for Agency Accountability and Community Resolution: Civil Rights, Human Rights, Environmental Benefits Agreements, SEPs and Other Tools.” A poignant theme that emerged from the conversations was the longstanding failure of EPA to enforce Title VI environmental justice complaints. “We’re here in this frustration because we’ve been talking about this for decades," Barbara noted.

Title VI of the Civil Rights Act of 1964 prohibits discrimination on the basis of race, religion, sex, or ethnicity by any agency that receives federal funds or permits. At the conference, Barbara distributed the Lawyers’ Committee’s most recent EJ report, Now is the Time, which was released in June 2010. The report can be viewed online on the EJ Project’s Publications and Resources page. More information on the EJ Conference can be accessed at its website.

More press on this conference can be accessed here.

'Left Out': Post-Katrina Housing Battle Continues

Tue, 30 Aug 2011 00:00:00 -0500

"Six years ago Monday, Hurricane Katrina blew up the U.S. Gulf Coast, killed more than 1,800 people and left hundreds of thousands homeless. The story of the coast's recovery varies from place to place.

For some, life is back to normal. Along the Mississippi coast, thousands affected by Katrina still live in battered houses. They've been trapped by a technicality. Their homes were damaged by wind gusts rather than Katrina's storm surge. [...]

Activists say it was predominantly African-Americans communities that were affected by wind. As with many situations related to Katrina's recovery, Gaulden says, race is part of the story.

"I think there would have been a different response if elderly white people had been the only folks affected," she says.

Back in 2008, civil rights groups sued the federal housing department to compel Mississippi to spend recovery money on poor and minority residents who they said were left out. The lawsuit documented clusters of unmet needs: people living in substandard homes with makeshift plumbing, faulty electricity, and mold and mildew problems.

"The core allegation of the complaint was the state had failed to extend assistance to wind-damaged homeowners and that the effect of that was to disproportionately leave out of the recovery African-American households," says Reilly Morse, who is with the Mississippi Center for Justice, one of the groups that sued.

After much negotiating and an agreement to drop the suit, the U.S. Department of Housing and Urban Development, the state and civil rights groups announced a $132 million settlement last November..."

Click here to read the full article.

Court Shut Down of NY Loan Scammer Homesafe America Picked Up By Reuters, New York Daily News, etc.

Wed, 17 Aug 2011 00:00:00 -0500

This week the Nassau County Supreme Court issued a sweeping order shutting down one of New York’s largest mortgage scam operations pending trial. The order is the most substantial victory to date in a year-long legal campaign against “loan modification scams” in New York and nationwide. The court order ceases the operations of Homesafe America Inc. and its successor corporation, United Solutions Law Firm, which are alleged to have scammed more than a thousand low- and middle-income homeowners by falsely promising to help customers modify the terms of their mortgages. Check out the news coverage on this case after the jump.

From Reuters:

"A Long Island judge on Monday ordered the temporary shutdown of New York-based companies accused of using "fast-talking salespeople and masterfully deceptive websites" to defraud more than a thousand homeowners in a multi-million mortgage loan modification scam..."

Click here for the full article.

From New York Daily News:

"The Levittown, L.I., firms allegedly charged homeowners across the country - including some in Brooklyn and Queens - illegal upfront fees ranging from $1,500 to $4,000. Then they did little or nothing for the money..."

Click here for the full article.

From Law360:

"A New York judge on Monday halted the operations of United Solutions Law Firm, a home mortgage modification company accused of running a scam that has snared thousands of low- and middle-income homeowners.

A group of homeowners claim United Solutions, Homesafe and nearly two dozen employees falsely told poor and middle-income homeowners that they could renegotiate their mortgages to obtain more favorable terms.

The homeowners sued in June for fraud, deceptive practices and false advertising, demanding at least $1.5 million in punitive damages."

Click here for the article (subscription required).

Further coverage can be read at:

Long Island Business Press - http://libn.com/2011/08/15/judge-shuts-down-li-mortgage-modifier-firm/

NY Foreclosure Law Blog - http://nyforeclosurelaw.com/2011/08/15/court-shuts-down-one-of-new-york%e2%80%99s-largest-mortgage-scam-operations/#more-295

Real Estate Rama New York - http://newyork.realestaterama.com/2011/08/16/injunction-obtained-in-new-york-loan-modification-scam-lawsuit-against-homesafe-america-inc-ID01571.html

Compliance Exchange - http://compliancesearch.com/compliancex/mortgage-fraud/mortgage-firm-takes-advantage-of-over-1000-homeowners/

Housing Predictor - http://www.housingpredictor.com/2011/mortgage-operation-shutdown.html

5 Signs of a Foreclosure Rescue Scam

Fri, 12 Aug 2011 00:00:00 -0500

On July 31, the National Bar Association held a panel to discuss the impact of the foreclosure crisis on communities of color at its 86th annual convention and exhibits. Black Enterprise spoke with two of the panelists—Yolanda D. McGill, senior counsel of the Fair Housing and Lending Project with the Lawyers’ Committee for Civil Rights Under Law, and Vicki King Taitano, director of the Foreclosure Legal Assistance Project with the Maryland Legal Aid Bureau—to get their thoughts on this growing problem. McGill noted the rise of scammers as one. "The overrepresentation of minorities in our scam database is very troubling and likely has many causes, such as the wealth gap that leaves struggling homeowners no savings or family funds to lean on and drives them to seek foreclosure rescue and modifications more often,” she says. “We also know that scammers tailor their marketing language to ethnic minorities, and there are organizations trying to determine if this activity is in violation of the law." With that in mind, here are five signs of a foreclosure rescue scam.

—Sheiresa Ngo

New Orleans unveils fresh model for housing the poor

Wed, 03 Aug 2011 00:00:00 -0500

By Jonathan E. Bachman, for USA TODAY

"The decaying brick buildings of what was known as the Magnolia Projects are now rows of freshly painted town homes with ornate balconies and manicured lawns. Stoops where dealers once sold dope and shot at rivals have been replaced by a clubhouse featuring a flat-screen TV and a pool where neighborhood kids splash.

The Magnolia Projects, once one of the city's most notorious public housing complexes, today is Harmony Oaks Apartments, a 460-unit mix of government-subsidized and market-priced apartments. It replaces one of six public housing projects across the city recently razed to make room for new apartments and a fresh approach to housing the city's poor..."

Click here to read the full article.

50-Plus Americans a Favorite Target of Mortgage Rescue Scammers

Mon, 25 Jul 2011 00:00:00 -0500

By Rita R. Robison, Consumer Specialist, Seattle pi

Older Americans are among the hardest hit by scams preying on distressed homeowners by offering foreclosure counseling or loan modification assistance for a fee.

As of July, homeowners nationwide have reported more than $40 million in losses from fees paid to fraudulent and deceptive “rescuers,” complaints submitted to the Lawyer’s Committee’s for Civil Rights Under Law since February 2010 show. Homeowners age 51 and older reported losses of more than $16 million, a 41 percent of the losses reported.

The Lawyer’s Committee, a group of attorneys that addresses racial discrimination, announced these results this week, as the new Consumer Financial Protection Bureau opened its doors.

“I am excited that the CFPB is finally becoming a reality,” Lawyers’ Committee Executive Director Barbara Arnwine said in a statement. “Consumers, particularly people of color, have gone far too long without proper protections from bad actors and discriminatory practices in the financial market which has adversely impacted the middle class. This new agency will demand better accountability for those providing financial products to consumers.”

Arnwine said the group is encouraged to see that one of the CFPB’s specific initiatives includes its Office of Older Americans, set to begin operations early next year.

Please click here for the external article.

Lawyers' Committee's Prevent Loan Scams Project Releases Issue Brief, "Seniors Among Hardest Hit by Foreclosure Rescue Scams"

Fri, 22 Jul 2011 00:00:00 -0500

On July 21, 2011, the Lawyers’ Committee’s Loan Modification Scam Prevention Network, a joint initiative of the Committee’s Legal Mobilization and Fair Housing & Fair Lending Projects, released an Issue Brief highlighting the plight of senior Americans, one of the many groups of homeowners in real distress who are particularly vulnerable to suffering at the hands of foreclosure rescue scammers.

Lawyers’ Committee’s staff attorneys analyzed information received from distressed homeowners who submitted complaints to the Lawyers’ Committee’s national Loan Modification Scam Database since its launch in February 2010. These complaints reveal that older Americans are among the hardest hit by foreclosure rescue scams, and exposed some striking numbers: as of July 11, 2011, homeowners nationwide had reported over $40 million ($40,220,895) in losses from fees paid to fraudulent and deceptive foreclosure “rescuers.” Moreover, homeowners age 51 and older reported losses of over $16 million ($16,593,535)—a staggering 41 percent of the total losses reported.

To learn more, click here for the Issue Brief and click here for the full press release.

Plaintiff in CA Class Action Against Mortgage Modification Scammer Interviewed on NBC Bay Area News

Wed, 20 Jul 2011 00:00:00 -0500

In early 2009, Ms. Jones wanted to modify the mortgage on her primary residence because a significant portion of her income went to pay for the mortgage. She first heard about the modification services being offered by the Rewire Defendants and the Nathanson Defendants from a friend who had referred her to a real estate agent. Ms. Jones paid $3,995 to modify her mortgage with the Defendants. She believed that if the modification was not successful, she would receive a refund from the Defendants.

After paying her upfront fee, Ms. Jones rarely heard from the Defendants. Nearly a year passed by without any substantive updates regarding Ms. Jones’ application. Ms. Jones’ lender eventually denied her modification request. Throughout the modification process, Ms. Jones asked for a refund from the Defendants. The Defendants refused to provide Ms. Jones with a refund as promised in the contracts she signed.

Click here to view the full interview.

Article Published Highlighting Ways Funders Can Support Fair Housing Advocates

Fri, 15 Jul 2011 00:00:00 -0500

Since the passage of the Fair Housing Act (FHA) in 1968, its promise to act as a deterrent to housing discrimination and a tool for dismantling segregation remains largely unfulfilled. Segregated housing patterns not only divide neighborhoods, but also perpetuate stubborn disparities in employment, education, income, wealth, and public transportation, as well as higher crime rates and poorer health conditions.

In order to address these disparities, the FHA requires that federal agencies engaged in housing and urban development (as well as those who receive their funding) administer housing programs in a manner that affirmatively furthers fair housing (AFFH).

This month, the Neighborhood Funders’ Group featured an article by Joe Rich, Director of the Fair Housing and Fair Lending Project at the Lawyers’ Committee, which outlines suggestions as to how funders can support fair housing advocates as they fight for improved enforcement of the AFFH provision and more comprehensive fair housing regulations, to finally “put teeth” into this important requirement.

Click here to read the full article.

Initial Victories in New Cases Filed against Two of New York's Largest Mortgage Scammers

Thu, 07 Jul 2011 00:00:00 -0500

The Lawyers’ Committee is pleased to report on two sweeping court orders from the New York State Supreme Court that restrain the activities of alleged loan modification scammers, providing early victories for financially vulnerable homeowners. The rulings pertain to two new cases filed last week by the Lawyers’ Committee and its pro bono counsel Davis Polk & Wardwell LLP in New York: Osmanzai, et al., v. Save My Home Corp., et al., 9471-2011 and Mook, et al., v. Homesafe America, Inc., et al., 9472-2011.

On July 5, Justice Thomas A. Adams of the Nassau County Supreme Court extended a temporary restraining order that restricts the activities and freezes the assets of a group of companies that operate under the names “Express Home Solutions” and “Home Preserve Law Group” (collectively, “EHS”) in Osmanzai v. Save My Home. The Lawyers’ Committee and Davis Polk originally filed a case against EHS entities back in March 2011, which was the first suit filed as part of the Lawyers’ Committee’s nationwide anti-scam campaign, the Loan Modification Scam Prevention Network (“LMSPN”). The media coverage that followed – including stories in The Wall Street Journal and New York Daily News – resulted in dozens of additional victims coming forward, compelling the Lawyers’ Committee to file this second lawsuit against EHS in late June to help many of these homeowners obtain legal recourse. Within days of this second filing, Justice Adams issued the restraining order to quickly shut down the alleged scam operations, vindicating the Plaintiffs’ efforts.

A similar order was issued on June 28 by Justice John M. Galasso, also of the Nassau County Supreme Court, which enjoins a group of individuals operating a separate business under the name “Homesafe America” (Homesafe) in Mook v. Homesafe. Based in Levittown, New York, Homesafe and its successor corporation, United Legal Solutions, are alleged to operate a constellation of websites advertising loan modification assistance. Court records indicate that Homesafe grossed more than $2 million in 2010 alone and, as of February 2011, is believed to have taken money from approximately 1,000 families across the country.

The cases are seeking a combined $3 million in punitive damages against the alleged scam operations, as well as court orders permanently preventing their owners and employees from engaging in mortgage-related activities.

“The Lawyers’ Committee has now filed three cases in New York to fight these widespread fraudulent schemes, with a total of four cases pending nationwide,” said Lawyers’ Committee Chief Counsel and Senior Deputy Director Jon Greenbaum. “We are committed to fighting this scourge through lawsuits like these and through coordination with and assistance to federal, state and local law enforcement.”

Since the launch of the LMSPN database in February 2010, more than 15,000 homeowners have reported scams or potential scams, totaling over $35 million lost. Over 800 of those complaints come from New York State residents, with reported losses of over $3 million.

Click here to read the full press release on the newest New York cases.

Click here to read the Osmanzai v. Save My Home complaint.

Click here to read the Mook v. Homesafe complaint.

Click here for a detailed “anatomy” of the Homesafe scam and key documents related to the case.

Lawyers' Committee's Loan Scam Campaign and NY Cases Featured on NYC WBAI's Morning News

Thu, 07 Jul 2011 00:00:00 -0500

WBAI Radio's "Wake Up Call" morning news program interviews Lawyers' Committee Counsel Eunice Rho about our newest loan scam cases filed in New York. Ms. Rho also highlights some key warning signs of a possible loan modification scam and how these mainly internet-based schemes target wide populations and leave homeowners in extreme financial distress.

Click here to listen to the recording in the WBAI archives. The loan scam feature begins at about 18:55 and ends at 26:40.

CA Lawsuit Goes After Loan Modification Fraud

Wed, 06 Jul 2011 00:00:00 -0500

Our case against a fraudulant loan modification scheme in the San Jose, CA area has been picked up by SF Gate:

"Struggling homeowners desperate to avert foreclosure seem like easy prey to some scam artists, who charge money to help them get loan modifications and then don't deliver, according to consumer advocates who say the problem is particularly acute in California.

Bay Area attorneys in June filed one of California's first class-action lawsuits against alleged loan-modification scammers, although one of the defendants says he was also a victim.

"The complaint alleges that these individuals abused the trust (of the victims) to take advance fees for work that either was never performed or performed in a manner that had little to no chance of success," said James Zahradka, supervising attorney at the nonprofit Law Foundation of Silicon Valley.

It filed the lawsuit in Santa Clara County Superior Court, along with the Lawyers' Committee for Civil Rights Under Law, a Washington nonprofit, and Orrick, Herrington & Sutcliffe, a law firm whose Menlo Park office is working on the case pro bono." [...]

Read the full article here.

Article on Katrina Settlement by Fair Housing Project Director Published in Clearinghouse Review

Tue, 14 Jun 2011 00:00:00 -0500

An article detailing the history behind the Katrina Recovery settlement between HUD and Mississippi by Joe Rich, director of the Fair Housing & Fair Lending Project, has been published in the May/June 2011 issue of the Clearinghouse Review. On November 8, 2010, HUD approved a disaster recovery plan redirecting $132 million to address the unmet housing needs of low income homeowners and renters in Mississippi.

Click here to read the full article.