Filed Date: Sept. 6, 2007
Closed Date: 2010
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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.
Summary Authors
Zhandos Kuderin (7/31/2014)
For PACER's information on parties and their attorneys, see: https://www.courtlistener.com/docket/4824895/parties/allen-v-decision-one-mortgage-company-llc/
Becker, Nance F. (California)
Chavez, Mark A. (California)
Ciolko, Edward W. (Pennsylvania)
Allensworth, R. Bruce (Massachusetts)
Blase, Gregory M. (Massachusetts)
O'Toole, George A. Jr. (Massachusetts)
Ciolko, Edward W. (Pennsylvania)
Costello, Kevin (Massachusetts)
Feiner, Gillian R (Massachusetts)
Gertler, Jonathan E. (California)
Kavanagh, Shennan Alexandra (Massachusetts)
Klein, Gary E. (Massachusetts)
Matthews, Gregory (Massachusetts)
Meltzer, Joseph H. (Pennsylvania)
Moffa, Donna Siegel (Pennsylvania)
See docket on RECAP: https://www.courtlistener.com/docket/4824895/allen-v-decision-one-mortgage-company-llc/
Last updated Jan. 24, 2024, 3:09 a.m.
State / Territory: Massachusetts
Case Type(s):
Fair Housing/Lending/Insurance
Special Collection(s):
Key Dates
Filing Date: Sept. 6, 2007
Closing Date: 2010
Case Ongoing: No
Plaintiffs
Plaintiff Description:
Black and Hispanic homeowners, who took out loans from Direct One Mortgage Company and HSBC Financing Corporation.
Plaintiff Type(s):
Public Interest Lawyer: No
Filed Pro Se: No
Class Action Sought: Yes
Class Action Outcome: Granted
Defendants
HSBC Financing Corporation, Private Entity/Person
Defendant Type(s):
Case Details
Causes of Action:
Fair Housing Act/Fair Housing Amendments Act (FHAA), 42 U.S.C. §§ 3601 et seq.
Equal Credit Opportunity Act (ECOA), 15 U.S.C. § 1691
Available Documents:
Injunctive (or Injunctive-like) Relief
Outcome
Prevailing Party: Plaintiff
Nature of Relief:
Injunction / Injunctive-like Settlement
Source of Relief:
Form of Settlement:
Court Approved Settlement or Consent Decree
Amount Defendant Pays: 6,500,000.00
Order Duration: 2010 - 2010
Content of Injunction:
Develop anti-discrimination policy
Issues
General:
Discrimination-area:
Discrimination-basis:
National origin discrimination
Race:
National Origin/Ethnicity: