Emigrant targeted minorities with predatory mortgages: jury

Bank marketed subprime loans with rates of up to 18 percent

TRD New York /
Jun.June 29, 2016 10:50 AM

The subprime mortgage crisis of 2008 came and went, but Emigrant Savings Bank continued to offer predatory loans to minority homeowners, a Brooklyn jury found Monday.

Ending a month-long trial, the jury concluded that the New York City-based bank headed by Howard Milstein, discriminated against eight minority homeowners by marketing “highly abusive” loans with interest rates of up to 18 percent, according to the New York Times.

Homeowners, including a home health aide and Rikers Island employee, filed a lawsuit against Emigrant in 2011, claiming the bank targeted minority borrowers with low credit scores. The bank allegedly offered the minority homeowners offered no-income refinancing loans between 2005 and 2009.

During the trial, one homeowner said she and her husband refinanced their Brooklyn home to pay off $30,000 in debt. An independent broker assured her the monthly payments to Emigrant would go down after six months, but that did not happen.

The jury awarded six plaintiffs a total of $950,000 in damages, while two others waived their claims after reaching loan modification agreements with the bank.

Bank officials said the mortgages allowed low-income clients access to the credit market that they otherwise would not have. The loans “were a ‘lifeline’ for these consumers — which is why more than 70 percent of the borrowers in this program succeeded and kept their homes,” the bank said in a statement following the verdict. Emigrant plans to appeal the jury’s decision. [NYT] – E.B. Solomont

Related Articles

Mayor Bill de Blasio and Rikers Island (Credit: Getty Images)

Real estate development not coming to Rikers Island, mayor says

Steve Morriss, AECOM's Group President of Design and Consulting Services in the Americas, and Riker's Island (Credit: Wikipedia)

City taps AECOM to lead replacement
of Rikers

The city is scrapping plans for a new 40-story lower Manhattan jail

City considers opening new jail downtown

City struggles to find a site in the Bronx for jail development 

Howard Milstein is teeing up his new golf magazine for a move

Milstein plans $100M renovation of
335 Madison Ave.

Rikers Island

It’s official: City vows to close Rikers