Consumer Law

Baltimore Fair Lending Suit Rejected

By Alan White

By Alan White

In an interesting application of the Iqbal/Twombley "I know it when I see it" plausibility standard, a second judge granted a motion to dismiss filed on essentially the same grounds as the motion that was denied by a different judge earlier in the case. 

Judge Motz's decision addresses many interesting questions of interest not only to consumer credit and civil rights specialists but also concerning the constitutional and prudential standing doctrines.  Among the facts whose plausibility the court determines under Rule 12 is whether the lender's reverse redlining and foreclosures caused home vacancies and resulting burdens on the City, or whether instead the City's distress was the result of "extensive unemployment, lack of educational opportunity and choice, irresponsible parenting, disrespect for the law, widespread drug use, and violence." 

The plaintiffs are not out of court, because the ruling permits Baltimore to file an amended complaint, alleging more specific harms flowing from the particular homes left vacant after Wells Fargo foreclosures, an invitiation plaintiffs will no doubt accept. 

I recently posted a paper on SSRN discussing some related issues, "Borrowing While Black: Applying Fair Lending Laws to Risk-Based Mortgage Pricing."

Full post as published by CL&P Blog on January 12, 2010 (boomark / email).