Barclays Accused of Predatory Lending Targeting Minority Homeowners in NYC

The story is available here, the class action complaint filed by MFY Legal Services is available here, and the press release is excerpted below:

"Plaintiff Tony Wong, a long-time Staten Island homeowner and school security officer for the New York City Police Department, alleges he fell prey to Barclays’ scheme to market risky, predatory mortgages in New York City’s minority neighborhoods. He claims that in September 2007, he was duped into refinancing with Barclays’ wholly owned subprime subsidiary EquiFirst Corporation.  With high monthly payments and an 11.075% interest rate, Mr. Wong’s mortgage was engineered to fail but only after his savings ran dry in his attempt to keep up with the mortgage payments. 

According to publicly available records, Mr. Wong was not the only minority who received a disastrous EquiFirst loan. During the year Mr. Wong’s loan was originated, the vast majority of the predatory loans EquiFirst issued in the New York City area were for homes in minority neighborhoods. Taking advantage of New York’s segregated housing market, Barclays, through EquiFirst, sold nearly 50% of its predatory loans to homeowners who lived in neighborhoods with 80 percent or greater minority populations. Mr. Wong’s home is located in a neighborhood that is now 69 percent minority and was 56 percent minority in 2007. These subprime mortgages were largely bundled, securitized and sold on Wall Street by investment banks like Barclays in the form of mortgage-backed securities. (link)"

MFY attorney Elizabeth M. Lynch explains:

“This lawsuit demonstrates that the profits Barclays made in the housing market run-up in the mid-2000s came on the backs of minority borrowers in New York City like Mr. Wong,” said Elizabeth M. Lynch, a staff attorney at MFY. “Barclays should be held responsible for its fraudulent conduct, and borrowers like Mr. Wong should be made whole for the suffering Barclays caused them. While the media touts the recovery of the housing market, communities of color are still reeling from the effects of the mortgage crisis.” (link)