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Case Name Allen v. Decision One Mortgage Company FH-MA-0005
Docket / Court 1:07-cv-11669 ( D. Mass. )
State/Territory Massachusetts
Case Type(s) Fair Housing/Lending/Insurance
Case Summary
On September 6, 2007, a black homeowner filed a class-action lawsuit in the U.S. District Court for the District of Massachusetts against private banks and lenders, Direct One Mortgage Company and HSBC Finance Corporation, under the Equal Credit Opportunity Act ("ECOA"), the Fair Housing Act ("FHA") ... read more >
On September 6, 2007, a black homeowner filed a class-action lawsuit in the U.S. District Court for the District of Massachusetts against private banks and lenders, Direct One Mortgage Company and HSBC Finance Corporation, under the Equal Credit Opportunity Act ("ECOA"), the Fair Housing Act ("FHA"), 42 U.S.C. § 1981, and 42 U.S.C. § 1982. The plaintiff alleged that the defendants maintained a pattern or practice that had a discriminatory impact on black applicants in their home financing policies and practices, including fraudulent concealment. Specifically, the plaintiff alleged that the defendants' policy authorizing unchecked, subjective surcharge of additional points and fees to an otherwise objective risk-based financing rate, had a discriminatory impact on black homeowners, creating a significantly higher likelihood of exposure to discretionary points and fees. Plaintiff sought declaratory and injuctive relief.

On November 2, 2007, the defendants filed a motion to dismiss, though after the plaintiff amended his complaint, the Court (Judge George A. O'Toole, Jr.) ruled the motion to dismiss moot.

On November 27, 2009, the plaintiff filed an amended complaint. The complaint added three named plaintiffs, who were Hispanic. Thus, the complaint was not a class action on behalf of similarly situated black and Hispanic homeowners. The complaint also added several defendants, who were subsidiaries of HSBC. In other respects, the compliant reiterated the original allegations. On the same day, the plaintiffs filed a notice of settlement.

Under the settlement agreement, the parties sought to certify class consisting of "all African-American or Hispanic persons throughout the United States who, between January 1, 2004 and the date of entry of the Preliminary Approval Order, obtained residential closed-end real estate secured loans from any of the following businesses: Decision One, HFC/Beneficial, HSBC Mortgage Corp. (USA) or HSBC Mortgage Services Telesales. The defendants agreed to identify class members based on their data. The defendants agreed to pay $6,500,000.00 for the benefit of the settlement class, including $1,800,000.00 in attorney's fees and $15,000.00 in service fees to the plaintiffs. Class members, who borrowed from Decision One, could claim $200 per loan. Two organizations received $125,000.00 to support financial education, homeownership education and/or foreclosure counseling activities. If anything remained, the two organizations would be paid a larger amount, but not exceeding $750,000.00. Any residual monies would be paid to charitable organizations engaged in housing assistance or consumer credit education, to be chosen by the mutual agreement of the parties. The defendants agreed to provide quarterly reports to the class counsel for the duration of the agreement. The defendants agreed to provide loan restructuring and foreclosure mitigation programs to class members until June 30, 2010.

On December 9, 2009, the Court issued an order preliminarily approving the settlement and certifying class. Following a fairness hearing, the Court issued the final judgment in the case approving the settlement on May 13, 2010.

Zhandos Kuderin - 07/31/2014


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Issues and Causes of Action
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Issues
Content of Injunction
Develop anti-discrimination policy
Reporting
Defendant-type
Bank or credit provider
Discrimination-area
Lending
Discrimination-basis
National origin discrimination
Race discrimination
General
Disparate Impact
Pattern or Practice
Predatory lending
National Origin/Ethnicity
Hispanic
Plaintiff Type
Private Plaintiff
Race
Black
Causes of Action Equal Credit Opportunity Act (ECOA), 15 U.S.C. § 1691
Fair Housing Act/Fair Housing Amendments Act (FHAA), 42 U.S.C. §§ 3601 et seq.
Defendant(s) HSBC Financing Corporation
Plaintiff Description Black and Hispanic homeowners, who took out loans from Direct One Mortgage Company and HSBC Financing Corporation.
Indexed Lawyer Organizations None on record
Class action status sought Yes
Class action status granted Yes
Prevailing Party Plaintiff
Public Int. Lawyer No
Nature of Relief Attorneys fees
Damages
Injunction / Injunctive-like Settlement
Source of Relief Settlement
Form of Settlement Court Approved Settlement or Consent Decree
Order Duration 2010 - 2010
Case Closing Year 2010
Case Ongoing No
Docket(s)
1:07-cv-11669 (D. Mass.) 04/08/2011
FH-MA-0005-9000.pdf | Detail
PACER [Public Access to Court Electronic Records]
General Documents
Class Action Complaint 09/06/2007
FH-MA-0005-0005.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Order 09/22/2008 (D. Mass.)
FH-MA-0005-0001.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Jury Trial Demanded 11/27/2009
FH-MA-0005-0002.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Stipulation and Agreement of Settlement 11/27/2009
FH-MA-0005-0006.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Preliminary Approval Order 12/09/2009 (D. Mass.)
FH-MA-0005-0003.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Final Approval Order and Judgment 05/13/2010 (2010 WL 1930148) (D. Mass.)
FH-MA-0005-0004.pdf | WESTLAW | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Judges O'Toole, George A. Jr. (D. Mass.)
FH-MA-0005-0001 | FH-MA-0005-0003 | FH-MA-0005-0004 | FH-MA-0005-9000
Monitors/Masters None on record
Plaintiff's Lawyers Becker, Nance F. (California)
FH-MA-0005-0002
Chavez, Mark A. (California)
FH-MA-0005-0002 | FH-MA-0005-0006 | FH-MA-0005-9000
Ciolko, Edward W. (Pennsylvania)
FH-MA-0005-0002
Costello, Kevin (Massachusetts)
FH-MA-0005-0002 | FH-MA-0005-9000
Fanning, Lori A. (Illinois)
FH-MA-0005-0005
Feiner, Gillian R (Massachusetts)
FH-MA-0005-0005 | FH-MA-0005-9000
Friedman, Andrew S. (Arizona)
FH-MA-0005-0002
Gertler, Jonathan E. (California)
FH-MA-0005-0002
Harrison, Wendy J. (Arizona)
FH-MA-0005-0002
Kavanagh, Shennan Alexandra (Massachusetts)
FH-MA-0005-0002 | FH-MA-0005-0005 | FH-MA-0005-9000
Klein, Gary E. (Massachusetts)
FH-MA-0005-0002 | FH-MA-0005-0005 | FH-MA-0005-9000
Matthews, Gregory (Massachusetts)
FH-MA-0005-0005
Meltzer, Joseph H. (Pennsylvania)
FH-MA-0005-0002
Miller, Coty R. (California)
FH-MA-0005-0002 | FH-MA-0005-0005
Moffa, Donna Siegel (Pennsylvania)
FH-MA-0005-0002
Rothman, Robert M. (New York)
FH-MA-0005-0006
Sobol, Thomas M. (Massachusetts)
FH-MA-0005-0005
Stoia, John J. (California)
FH-MA-0005-0002
Taren, Jeffrey L. (Illinois)
FH-MA-0005-0002
Van Tine, Matthew E. (Illinois)
FH-MA-0005-0005 | FH-MA-0005-9000
Defendant's Lawyers Allensworth, R. Bruce (Massachusetts)
FH-MA-0005-9000
Blase, Gregory M. (Massachusetts)
FH-MA-0005-9000
Freidel, Irene C. (Massachusetts)
FH-MA-0005-9000
Glass, Andrew C. (Massachusetts)
FH-MA-0005-9000
Hancock, Paul F. (Florida)
FH-MA-0005-9000
Messenger, Lucas A. (California)
FH-MA-0005-9000
Newman, Stephen J. (California)
FH-MA-0005-9000
Sanchez, Melissa D. (Florida)
FH-MA-0005-9000
Strickland, Julia B. (California)
FH-MA-0005-0006 | FH-MA-0005-9000
Other Lawyers None on record

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