A federal court has denied a joint motion filed by 15 major financial institutions seeking to dismiss the NAACP’s landmark lawsuit challenging racial discrimination in sub-prime home mortgage lending.  The court found that the NAACP had standing to bring the lawsuit, and that it had adequately stated its claims for the lawsuit to proceed.  The lenders will now be required to turn over information and documents regarding their mortgage policies and practices.

“This victory is significant, and was a long time coming,” said NAACP President Ben Jealous.   “It is time for these lenders to be held accountable.  We look forward to forcing real change and real relief through this lawsuit.”

According to the lawsuit, African American homeowners who received mortgage loans had a more than 30 percent greater likelihood of being issued a higher rate sub-prime loan than Caucasian borrowers with the same qualifications.  The Federal Reserve Board, U.S. Department of Housing and Urban Development, and FDIC have all made similar observations.  

Roger Vann, Senior Vice President for Field and Membership stated, “Hundreds of neighborhoods have had the fabric of their community life ruined and millions of families have lost their homes because of racially discriminatory lending policies.  This lawsuit demonstrates how critical l it is for Congress to not allow banks to be granted immunity from racially discriminatory practices and to insure that they are held accountable under the Troubled Asset relief Program. Otherwise the destructive impact of these policies will only continue to devastate neighborhoods and families. ”

Mortgage lenders named in the lawsuit include: Accredited Home Lenders, Inc., Ameriquest Mortgage Co., Bear Sterns Residential Mortgage Corp. d/b/a Encore Credit, Chase Bank USA, Citimortgage, First Franklin Financial Corp., First Tennessee Bank d/b/a First Horizon National Corp., Fremont Investment & Loan, GMAC Mortgage Group, LLC, GMAC ResCap, J.P. Morgan Chase & Co., Long Beach Mortgage, Option One Mortgage Corp., SunTrust Mortgage, and WMC Mortgage, LLC.

“The NAACP brought this suit as part of its longstanding demand that offending lenders stop discriminatory practices and bring their activities into compliance with federal law, including the Fair Housing Act, the Equal Credit Opportunity Act, and the Civil Rights Act,” said NAACP Interim General Counsel Angela Ciccolo.  “We look forward to now presenting our case to a jury.”    

Representing the NAACP is its Interim General Counsel Angela Ciccolo in Baltimore, Maryland; Brian Kabateck and Richard Kellner of Kabateck Brown Kellner in Los Angeles, California; and Austin Tighe of Feazell & Tighe, L.L.P. and Gary Bledsoe of Law Offices of Gary Bledsoe & Associates, both in Austin, Texas.