Relman, Dane & Colfax has represented both individuals and organizations in the area of lending discrimination. Our attorneys have litigated cases involving redlining of minority communities and the targeting of individuals and communities for predatory mortgage and automobile loans because of race or ethnicity. We have also represented cities and fair housing organizations that have challenged mortgage lending policies that discriminate against minority communities. The policies we have challenged include mortgage lenders targeting minority communities for predatory loans and causing high rates of foreclosures and refusing to make loans secured by properties located on Indian reservations, properties used as group homes for persons with disabilities, and row houses or lower-value housing that are located in predominately minority communities. The Firm has also brought cases on behalf of individuals based upon consumer protection statutes.
Relman, Dane & Colfax Files Discrimination Complaint Against Travelers Insurance
Federal Court Allows Fair Housing Claims Against Property Insurer to Proceed
Relman, Dane & Colfax Files Redlining Lawsuit Against Santander Bank on Behalf of Providence, Rhode Island
Banking Law Journal Discusses the Exposure of Securitization Trustees Under the Fair Housing Act for Poorly Maintained REO Properties
Court Approves $5 Million Settlement of Nation's First Reverse Redlining Case Against a For-Profit College
- Baltimore Settles Landmark Fair Lending Case Against Wells Fargo
Relman, Dane & Colfax Files Amicus Brief In Support of Local Effort to Use Eminent Domain to Prevent Foreclosures
Morgan v. Richmond School of Health and Technology, Inc.
On August 3, 2011, Relman, Dane & Colfax filed an amended class action complaint against Richmond School of Health and Technology, Inc. ("RSHT"), a for-profit vocational college in Chester and Richmond, Virginia. The amended complaint alleges that RSHT uses deceptive practices to encourage students to take out large federal student loans for an education that it knows is inadequate, and that RSHT engages in "reverse redlining" by targeting African Americans and residents of low-income neighborhoods for enrollment. As a result of these practices, students graduate from RSHT saddled with large debts but without improved employment opportunities and will have impaired credit if they default. To read more about the case, click here.
Memphis v. Wells Fargo and Baltimore v. Wells Fargo: Discriminatory Lending
Wells Fargo's discriminatory lending practices have resulted in extraordinarily high rates of foreclosure in minority neighborhoods in Baltimore, Memphis, and Shelby County, Tennessee. These foreclosures cause the Cities and County to lose property tax revenues and to spend additional funds for critical municipal services as foreclosed homes become vacant and deteriorate. Relman, Dane and Colfax represents these local governments in landmark fair lending suits against Wells Fargo under the Fair Housing Act in the U.S. District Court for the District of Maryland and the U.S. District Court for the Western District of Tennessee. For more information about the Baltimore case and a copy of the Second Amended Complaint, click here. For more information about the Memphis and Shelby County case and a copy of the First Amended Complaint, click here.
National Community Reinvestment Coalition Mortgage Lending Discrimination Cases
Relman, Dane & Colfax settled a series of cases filed in federal court or with the Department of Housing and Development by the National Community Reinvestment Coalition ("NCRC") challenging discriminatory mortgage underwriting guidelines. The NCRC is a national non-profit organization with the mission of increasing fair and equal access to credit and banking services. In NCRC v. NovaStar Mortgage, Inc. (D.D.C.) and NCRC v. Aegis Mortgage (HUD), the NCRC alleged that the mortgage companies, their parent corporations, and affiliates violated the Fair Housing Act by refusing to originate or securitize loans secured by properties on Indian reservations, group homes or row houses. Both NovaStar Mortgage and Aegis Mortgage also published and maintained written underwriting guidelines restricting these same three types of properties as collateral for a loan. These practices and written policies discriminated against and had a disparate impact on Native Americans, other minorities, and persons with disabilities. In NCRC v. Taylor, Bean & Whitaker (HUD), the NCRC alleged that the mortgage lender refused to originate or securitize loans secured on Indian reservations.
In the three settlements, the mortgage lenders and their affiliates agreed to discontinue the discriminatory policies, implement training programs to ensure their practices are compliant with the Fair Housing Act and compensate the NCRC for the diversion of its resources and the frustration of its mission caused by the discriminatory practices. Altogether the three mortgage companies paid more than $1 million to resolve the claims.
In NCRC v. NovaStar Mortgage, the District Court granted the NCRC's motion to amend to add as a defendant NovaStar Mortgage's president, W. Lance Anderson, finding that the NCRC could bring a claim against Anderson personally for his role in implementing and maintaining the discriminatory policies. The court subsequently denied Anderson's motion to dismiss. The order granting the motion to amend is available here.
On May 17, 2016, Relman, Dane & Colfax filed a lawsuit in the U.S. District Court for the District of Columbia on behalf of the National Fair Housing Alliance (NFHA) against Travelers Insurance Company, alleging that its denial of “habitational” insurance to apartment owners whose tenants are subsidized through the federal Housing Choice Voucher Program amounts to discrimination on the basis of race, sex and source of income. The lawsuit is the result of multiple investigations by NFHA that uncovered evidence of Travelers’ discriminatory practices in the District. To read more and review the Complaint click here.
On June 23, 2015, the U.S. District Court for the District of Connecticut denied a motion to dismiss discrimination claims filed against American Empire Surplus Lines Insurance Company by two landlords and the Connecticut Fair Housing Center. The case alleges violations of Connecticut state law based on “source of income,” and violations of both Connecticut state law and the federal Fair Housing Act based on a “disparate impact” theory of liability. The defendant, a surplus lines insurer operating in Connecticut, allegedly restricts the availability of property/casualty insurance to landlords based on their renting to “Section 8” tenants. The court addressed issues raised in the motion to dismiss, including coverage of insurance under Section 805 of the Fair Housing Act, deference to HUD regulations, and McCarran-Ferguson pre-emption. A copy of the decision is available here. To read more about the case, click here.
On May 29, 2014, Relman, Dane & Colfax filed a groundbreaking redlining lawsuit in United States District Court for the District of Rhode Island on behalf of the City of Providence against Santander Bank, N.A. Providence alleges that since 2009 Santander has deliberately discriminated by refusing to make prime mortgage loans available in minority neighborhoods as required under the Fair Housing Act. Santander gained a substantial share of the city’s mortgage lending market in 2009 when it completed its purchase of Sovereign Bank. To read the Complaint and Press Release click here.
Relman, Dane & Colfax is pleased to announce the publication of an article examining an emerging issue in the enforcement of fair housing claims against lenders for racially discriminatory maintenance of their REO properties. Specifically, the article refutes the oft-heard suggestion that lenders who hold title to REO properties as “trustees” for securitization trusts cannot be held responsible for fair housing claims. Authored by Stephen Dane and titled “The Exposure of Securitization Trustees to Liability Under the Fair Housing Act for Poorly Maintained Real Estate Owned Properties,” the article appears in the February 2014 issue of the Banking Law Journal, and is available by clicking here.
On July 25, 2013, U.S. District Judge John A. Gibney, Jr. granted final approval to a $5 million class action settlement in a lawsuit against a company that owns and operates a for-profit vocational college in the Richmond, Virginia area. The school was known as Richmond School of Health and Technology (“RSHT”) until recently changing its name to Chester Career College. Relman, Dane & Colfax filed the lawsuit in 2011 and believes it is the first reverse redlining case ever filed against a for-profit college in the country. The lawsuit alleged violations of the Equal Credit Opportunity Act, Title VI of the Civil Rights Act of 1964 and the Virginia Consumer Protection Act, and asserted state common law claims. To read more about the case click here.
On July 12, 2012, the City of Baltimore resolved its landmark fair lending lawsuit against Wells Fargo, filed on the City's behalf by Relman, Dane & Colfax over four years ago. Resolution of the suit was announced concurrently with an announcement by the United States Department of Justice that it has reached a national fair lending settlement with Wells Fargo worth at least $175 million. To read more about the case, click here.
One of the most hotly debated housing policy issues in the country is Richmond, California’s proposed use of eminent domain to stem the continuing tide of foreclosures. Earlier this week Relman, Dane & Colfax filed an amicus brief in the U.S. District Court for the Northern District of California, challenging the mortgage securitization industry’s threat to redline Richmond and any other city that uses eminent domain for this purpose. To read more and review the Memorandum of Amici Curiae click here.