The NAACP has filed class action lawsuits against Wells Fargo and HSBC alleging systematic racial discrimination in the sub-prime mortgage industry. The lawsuit claims that lending practices conducted by Wells Fargo and HSBC constitute disparate treatment/impact upon African-Americans and violate the Fair Housing Act, Equal Credit Opportunity Act and the Civil Rights Act (sections 1981 and 1982). Among other requests, the NAACP brings this lawsuit seeking equitable and/or injunctive relief and asks that the court order the defendants to modify their lending practices in accordance with the law.

via NAACP press release:

According to the lawsuits, African American homeowners who received sub-prime mortgage loans from these lenders were more than 30 percent more likely to be issued a higher rate loan than Caucasian borrowers with the same qualifications. Other studies cited in the lawsuits demonstrate that disparities are pervasive. In fact, upper income African Americans are more than twice as likely to receive higher cost loans as their lower income white counterparts. The National Community Reinvestment Coalition’s most recent study finds that discrimination against minorities persists in mortgage lending. The Federal Reserve Board, U.S. Department of Housing and Urban Development and the FDIC have all made similar observations.

“It is time for these lenders to be held accountable,” said NAACP President Benjamin Todd Jealous, “We look forward to forcing real change and real relief through this lawsuit.”

Both lawsuits are part of a larger effort aimed at alleged discrimination within the mortgage industry.

continued from NAACP press release:

These two new lawsuits raise the same claims as pending litigation by the NAACP against other mortgage industry leaders. Lenders named in this pending litigation include Accredited Home Lenders, Inc., Ameriquest Mortgage Co., Bear Sterns Residential Mortgage Corp. d/b/a Encore Credit, Chase Bank USA, Citimortgage, First Franklin Financial Corp., First Tennessee Bank d/b/a First Horizon National Corp., Fremont Investment & Loan, GMAC Mortgage Group, LLC, GMAC ResCap, Long Beach Mortgage and SunTrust Mortgage.

Read the rest of the press release, here. The original complaints against Wells Fargo and HSBC can be found here and here, respectively.

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