On July 15, 2016, four African-American New York City homeowners filed this class action lawsuit in the United States District Court for the Eastern District of New York. The plaintiffs sued the United States Department of Housing and Development (“HUD”) and Caliber Home Loans, Inc. under the ...
read more >
On July 15, 2016, four African-American New York City homeowners filed this class action lawsuit in the United States District Court for the Eastern District of New York. The plaintiffs sued the United States Department of Housing and Development (“HUD”) and Caliber Home Loans, Inc. under the Fair Housing Act, 42 U.S.C. § 3601 et seq., the Fair Debt Collection Practices Act, 15 U.S.C § 1692 et seq., and New York state law. They claimed HUD’s Note Sale program violated homeowner participants’ Fifth Amendment Due Process rights and had a disparate impact on both African-American homeowners and predominately African-American neighborhoods in New York City. The plaintiffs, represented by Mobilization for Justice and private counsel, sought declaratory and injunctive relief as well as damages.
HUD’s Federal Housing Administration’s (“FHA”) mortgage program was designed to support homeownership for low- and moderate-income Americans, providing benefits to help ensure that homeowners can maintain homeownership. Participants pay to receive these benefits. Beginning in 2010, HUD began selling delinquent FHA-insured mortgages to private investors without notice to the homeowners, who were then removed from the FHA mortgage program without notice. The plaintiffs claimed that these sales happened disproportionately in predominately African-American neighborhoods. They claimed the private investors, such as defendant Caliber Home Loans, then offered fewer protections to homeowners, and even pushed them into predatory mortgage modifications. This led to higher foreclosure rates for these participants, adversely impacting African Americans and destabilizing African-American neighborhoods in New York City.
On December 9, 2016, the case was reassigned from Judge Carol Bagley Amon to Judge Eric N. Vitaliano. On July 12, 2017, the defendants filed a motion to dismiss.
The parties filed cross motions for summary judgment.
On July 29, 2019, Magistrate Judge Steven M. Gold recommended that HUD's motion to dismiss be granted, finding issues with both standing and the plaintiffs' failure to state a claim. Before Judge Vitaliano made a decision on whether to adopt Judge Gold's findings, the parties reached a confidential settlement agreement on November 15, 2019.
The court closed the case on November 20, 2019.
Sarah McDonald - 02/03/2018
Hope Brinn - 04/20/2020
compress summary
