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NAACP files lawsuit over home loans

July 12, 2007|From the Associated Press

The NAACP sued a dozen mortgage lenders Wednesday, claiming that the companies discriminated against blacks by steering them into higher-interest, sub-prime loans while giving more favorable loan terms to white borrowers.

The lawsuit, which seeks class-action status, was filed in U.S. District Court in Los Angeles.

It demands a court order that would bar the lenders from discriminating against blacks and compel them to comply with fair housing and credit laws.

Among the defendants are Ameriquest Mortgage Co., a unit of Orange-based ACC Capital Holdings, one of the nation's largest sub-prime lenders.

Chris Orlando, a spokesman for Ameriquest, said he could not comment on specifics of the lawsuit because the company had not yet seen it.

Sub-prime loans often are aimed at borrowers considered by lenders to be a higher risk because of spotty credit histories. People who obtain such loans can end up paying much more interest than other borrowers.

In the lawsuit, the NAACP contends that the lenders have engaged in "institutionalized, systematic racism" and that black homeowners who received sub-prime loans from the lenders in 2004 were 30% more likely to get higher interest rates than white borrowers with the same financial qualifications.

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