Massachusetts sues H&R Block over mortgages to minorities

June 6, 2008

The headline is straight from Yahoo! News because I don’t think there’s a better way to say it.  Massachusetts is suing H&R Block for Option One Mortgage’s lending practices.  Option One is owned by H&R Block.  It will be interesting to see how this plays out and whether it sets the precedent for future legal action against lenders and brokers.

From the article:

Massachusetts authorities sued H&R Block Inc on Tuesday, charging that its mortgage unit discriminated against black and Latino borrowers and escalated a crisis over property foreclosures in the state.

The lawsuit is the first by a U.S. state to accuse a subprime-mortgage lender of civil rights violations following a wave of foreclosures of homes in poor, often black, neighborhoods nationwide.

The complaint, filed in Suffolk Superior Court, accuses H&R’s subprime-lending subsidiary, Option One Mortgage Corp, of engaging “in unfair and deceptive conduct on a broad scale.”

The complaint said the H&R Block unit charged black and Latino borrowers higher points and fees to close their loans than similarly situated white borrowers and targeted black and Latino consumers with marketing “that pushed the sale of predatory loan products.”

“Marketing loan products that were designed to fail not only harms individuals and families who are struggling to afford their homes, but also has a negative impact on neighboring homeowners and the community at large,” Coakley said in a statement.

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