The Real Deal Miami

Association files civil rights complaint on behalf of homebuyers

December 01, 2008 02:27PM

The National Community Reinvestment Coalition has filed a civil rights complaint with the U.S. Department of Housing and Urban Development against two Wall Street ratings agencies. The complaint alleges that Fitch Ratings and Moody’s Investor Services’ ratings of subprime mortgage bonds disproportionately harmed African-American and Latino homebuyers and contributed to the foreclosure crisis. The complaint says the companies “knew or should have known” that subprime loans were disproportionately marketed to minority borrowers and that the loans “were designed to fail” because the payment terms were unfair and borrowers did not have enough income to meet the loan terms. Because of the foreclosure crisis, $164 to $200 billion in wealth will be lost from minority communities, according to the coalition. TRD