SALT LAKE CITY – Utah Attorney General John Swallow and the attorneys general in 11 other states are asking the U.S. Supreme Court to stop mortgage policies that charge higher rates to minorities. The attorneys general filed an amicus brief Monday that claims lenders are using policies that violate the federal Fair Housing Act.
The brief highlights the experience of some states in pursuing disparate impact claims against banks and mortgage companies such as Option One, Countrywide and Wells Fargo that made high-risk subprime home mortgage loans to distressed minority borrowers.
The disparate impact claim may be pursued when a policy appears to be objective or neutral but actually leads to discrimination against a protected group. For instance, the cases involving subprime lenders challenged seemingly neutral policies that actually caused African-American and Hispanic borrowers to pay hundreds or thousands of dollars more for their loans than comparable white borrowers.
The brief states “not all adverse housing outcomes, or all causes of residential segregation, can be remedied through litigation. But enforcement actions under the FHA and similar state laws are critical to combating discrimination and its pernicious effects. Disparate impact claims are needed to bridge between the direct forms of discrimination provable through a disparate treatment framework, and more subtle forms of discrimination characterized by concealed or subconscious bias—all of which continue to operate in and shape housing markets.”
The FHA protects individuals from discrimination in the sale and rental of housing as well as other housing-related transactions on the basis of race, color, gender, national origin, disability, religion, and familial status.
The brief was submitted in the case of Township of Mount Holly v. Mt. Holly Gardens Citizens in Action, Inc., which is scheduled for argument on Dec. 4, 2013. The brief was led by Massachusetts Attorney General Martha Coakley and joined by California, Connecticut, Delaware, Hawaii, Illinois, New Mexico, New York, Oregon, Utah, Vermont, and Washington.
A copy of the brief can be found here: Mortgage Amicus 10-28-13
Submitted by the Office of the Utah Attorney General
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