Last month a federal judge ruled that a discrimination case filed against Morgan Stanley, on behalf of African Americans under the Fair Housing Act could proceed. As reported by the ACLU, which is bringing the suit with other organizations, it alleges that Morgan Stanley pressured lenders to offer high-risk mortgage loans to African-American borrowers who are not properly informed about the risks and may not be able to afford them. This is the first lawsuit where a plaintiff has gone beyond suing the subprime lender and targeted the investment bank for its conduct. In ruling that the case may proceed, the judge stated that the Fair Housing Act governed Morgan Stanley’s conduct as a “loan purchaser and mortgage securitizer.” Accordingly, the law prohibits Morgan Stanley from illegally discriminating in selecting which real-estate related transactions are available as well as discriminating ‘in the terms or conditions of such a transaction.” If successful, this case could be the impetus for many future cases against investment banks for their roles in the process of offering high-risk loans to minorities.
Housing discrimination is illegal when it comes to protected classes, such as race, national origin, religion, disability, family status, sex (including sexual harassment), sexual orientation, marital status, age or source of income. If you believe you have been the victim of housing discrimination, you should contact an attorney and protect your rights.
