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Justice Department Opens New Division to Handle Lending Civil Rights Cases

January 18, 2010

Our San Bernardino County loan modification attorneyshave written here before about the problem of major lenders targeting racial minorities for expensive subprime or even predatory mortgage loans. This practice, known as "reverse redlining," is the subject of lawsuits against lender Wells Fargo by several municipalities, which claim it violates federal civil rights laws and destroys city neighborhoods. Now, the New York Times reported Jan. 14, the federal Department of Justice has launched a new campaign against unfair lending practices, to be part of its Civil Rights Division. Led by special counsel Eric Halperin, head litigator for the nonprofit Center for Responsible Lending, the new unit will investigate all types of unfair lending practices and file federal civil rights lawsuits when appropriate.

Reverse redlining is the practice of targeting minority borrowers for expensive "subprime" or even predatory mortgage loans. It is illegal under the federal Fair Housing Act, which bans practices that have a "disparate impact" on minorities. This is the legal theory behind the Baltimore and Memphis lawsuits, both of which accuse Wells Fargo of explicit and intentional reverse redlining, with supporting affidavits from former loan officers. An attorney who helped both cities said he hoped the new Justice unit would consider joining the cases. The Civil Rights Division has itself opened 38 investigations into reports of lending discrimination, and more may be coming. The Justice Department plans to analyze Treasury Department data to look for disparate impacts in loan modification decisions, and is also working with state attorneys general on subprime lending issues.

As Placentia loan modification lawyers, we are extremely pleased to see the federal government paying attention to fair housing laws. In fact, as one attorney in the article puts it, the Justice Department involvement in enforcing federal law may be overdue. Because we followed the subprime lending crisis closely, we know that minority communities have been particularly hard-hit by expensive, "exotic" and adjustable-rate loans. This may be particularly true here in Southern California, where unscrupulous lenders may take advantage of our large population of non-English-proficient immigrants. With this move, the federal government has signaled that it takes this issue seriously. We hope that discourages lenders from exploiting people on the basis of race.

Howard Law PC has an active practice helping homeowners throughout California seek sustainable and fair modifications to their loans. After following the housing crisis for more than a year, we understand that lenders and loan servicers don't seem interested in "negotiating" so much as stalling and giving their clients a runaround. We help clients cut through those excuses and red tape to get the help they need. Even if you haven't been successful on your own, we believe our status as San Juan Capistrano loan modification attorneys helps us get results because it puts lenders on notice that they could be sued for violating your rights. In fact, we can and do sue lenders whenever necessary to stop unfair foreclosures or predatory lending.

If you're struggling to get your mortgage loan modified, but your lender doesn't seem to be interested, you should talk to Howard Law right away. To set up a free, confidential case evaluation, you can call us toll-free at 1-800-872-5925 or contact us through the Internet.