NEW YORK — Morgan Stanley is being accused of discriminating against black homeowners and violating federal civil rights laws by providing strong incentives to a subprime lender to originate mortgages that were likely to go unrepaid.
The lawsuit, which seeks class-action status, was filed Monday by the American Civil Liberties Union and others on behalf of five Detroit residents and Michigan Legal Services. It was filed in U.S. District Court in New York.
“We believe these allegations are completely without merit and plan to defend ourselves vigorously,” Morgan Stanley said in a statement.
The five homeowners in the lawsuit received their loans from subprime lender New Century Mortgage Corp., which has since collapsed.
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1 comment:
Was it not the ACLU who threatened to sue because not enough blacks were being granted loans even though they did NOT qualify? Is that not how these subprime or risky loans originally came about. With the ACLU you can not win either way!
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