Sale of Federal Mortgages to Investors Puts Greater Burden on Blacks, Suit Says


The suit says, the government is fueling racial disparities not through its lending policies but in how it handles foreclosures.
News Story (New York)

Jessica Silver-Greenberg, Michael Corkery
New York Times (NYT)
August 14, 2016
READ THE FULL STORY HERE

Tags: Housing: Foreclosure, Housing: Mortgage, Minorities: Racial/Ethnic

Organizations mentioned/involved: Mobilization for Justice (New York City)


DETAILS

The lawsuit, filed on Friday by MFY Legal Services and the law firm Emery Celli Brinckerhoff & Abady in United States District Court in Brooklyn, is the latest tussle over how the government turned to Wall Street to help sort through the wreckage of the 2008 financial crisis. The mortgage sales are part of an effort by HUD to reduce the burden on its insurance fund that backstops home loans to lower-income borrowers who have gone into default.

“This lawsuit exposes that the historic racism that has kept our communities segregated, that has blocked African-Americans from sustainable homeownership, and that increases the racial wealth gap in this country is still alive and well,” said Elizabeth Lynch, a supervising attorney at MFY Legal Services.