On January 18, 2008, minority borrowers filed a class action complaint in the U.S. District Court for the Northern District of California against Greenpoint Mortage Funding, Inc. ("Greenpoint"), under the Equal Credit Opportunity Act("ECOA"), the Fair Housing Act ("FHA"), 42 U.S.C. § 1981, and 42 U.S.C. § 1982. The plaintiffs sought class certification, injunctive, equitable, and monetary relief, alleging Greenpoint's practices had a disparate impact on minority applicants for home mortgage loans. Specifically, they alleged that Greenpoint's credit pricing policy, whereby subjective and discretionary financing charges and interest mark-ups were authorized, led to a higher likelihood of discretionary points, fees and interest rate mark-ups to minority applicants and increased the average cost of mortgage loans to minorities. Minorities were defined as black and Hispanic applicants.

The case then spent some time in pre-trial motions and alternative dispute resolution. On March 13, 2008, the plaintiffs filed an amended complaint. The parties continued settlement negotiations. On December 4, 2009, the plaintiffs filed a motion for preliminary approval of class action settlement. On December 16, 2009, the Court (Judge Thelton E. Henderson) issued an order expressing several concerns about the proposed settlement, such as low amount of payment ($15) to each class member, and the amount of attorney's fees.

On March 15, 2010, the plaintiffs filed a motion for class certification, which the Court granted. The class consisted of all African-American or Hispanic persons throughout the United States to whom Greenpoint originated a residential-secured loan in GreenPoint's wholesale lending channel between January 1, 2004 and January 1, 2008. The defendant appealed.

On November 3, 2010, the plaintiffs filed a motion for preliminary approval of the settlement agreement, which the Court granted on December 10, 2010. Under the agreement, the defendants agreed not to appeal class certification, and as such, the same class as above was included. The defendant agreed to pay $14,750,000.00 to the class, distributed among class representatives, pro rata among class members, and for attorney's fees. The defendant agreed to submit quarterly reports to the plaintiff's class counsel until the payments were fully made. $150,000.00 out of the payment went to a non-profit that would provide foreclosure counseling to class members. The defendant warranted that it was not originating any new wholesale residential real estate secured loans. If it did so, it would notify the plaintiffs first.

In accordance with the proposed settlement, the plaintiffs filed a second amended class action complaint on December 14, 2010. The plaintiffs stated the same facts, alleging pattern or practice of discrimination by Greepoint, and seeking injunctive, declaratory and monetary relief.

Following a fairness hearing, the Court issued a final approval order on April 12, 2011. It approved the settlement class (same as above). The attorney's fees were in the amount of $3,687,500.00, plus actual costs of $425,412.04. The Court retained jurisdiction over the enforcement and administration of the agreement.

Zhandos Kuderin - 07/23/2014


compress summary