Friday, September 5, 2008

Houston Woman Claims Racial Bias in Home Loan

After gas prices, the area of our struggling economy that has received the most attention is the lending crisis in the housing industry. Almost every evening, it seems the news brings us another story of a family who faces foreclosure after being unable to afford increasing mortgage payments. Banks and lending companies don't exactly evoke warm and fuzzy feelings these days. There is the belief among many people that lenders took advantage of home buyers through confusing fine print and a housing bubble that was certain to bust. Can the case also be made that lenders developed the terms of the contracts with a racial bias? Nanette Lewis of Baytown, TX believes so, and she is taking her lenders to court.

Mrs. Lewis is suing both Alpha Mortgage USA Inc. and American Home Mortgage Servicing Inc, claiming that the companies practiced predatory lending on her because she is black. When she and her husband closed on their home in 2006, they were handed last-minute changes to their contract and simply told not to worry about them. As it turns out, perhaps a little bit of worrying would have been in order. The mortgage was for more than $175,000 on a home valued at about $156,000, including thousands of dollars in points and fees.

As far I can tell, the information disclosed surrounding the case so far shows no evidence that race was a factor in the contract details. But, perhaps future details will reveal such discrimination was at play. Mrs. Lewis is asking that the lien be removed from her home and that others are made aware of what happened to her.

This case appears to be the first of its kind to be filed in Texas. As with similar cases that have played out in other states, the debate between personal responsibility by the consumer and the obligation of lending companies to develop fair contracts will be critical.

At Bertolino LLP, we have attorneys who specialize in business litigation as well as creditors' rights and collections. If you are a lender or contractor who is owed money from a client or if your business is being accused on unfair practices, please contact our Austin, Houston or San Antonio office for help today.

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