National Community Reinvestment Coalition Files Discrimination Complaint Against Wall Street Securitizer and Subsidiary Mortgage Originator

Morgan Stanley & Saxon Mortgage Face Fair Lending Complaints to HUD &

SEC

    WASHINGTON, Sept. 24 /PRNewswire-USNewswire/ -- The National Community
 Reinvestment Coalition (NCRC) has filed a civil rights complaint against
 Morgan Stanley, Morgan Stanley Mortgage Capital Holdings, LLC., Saxon
 Mortgage, Inc., Saxon Asset Securities Company and Saxon Capital, Inc.,
 (collectively, "Morgan Stanley") to the United States Department of Housing
 & Urban Development and the United States Securities & Exchange Commission.
 This is the first challenge against a Wall Street securitizer that alleges
 redlining under the Federal Fair Housing Act.
 
     NCRC alleges that that Morgan Stanley intentionally discriminated
 against minorities seeking mortgages in predominantly African American,
 Latino, Native American, Asian and Pacific Islander communities throughout
 the United States. This complaint holds Morgan Stanley accountable for fair
 lending and SEC violations that it has implemented since acquiring Saxon in
 December of 2006.
 
     "Morgan Stanley & Saxon intentionally structured underwriting to deny
 homeownership to qualified African American, Latino, Pan-Pacific and Native
 American communities across the country" stated NCRC President & CEO John
 Taylor.
 
     The complaint recognizes the important role that Wall Street plays in
 providing liquidity to the housing markets and how that role is often
 performed in a biased and unfair manner. Working families, minorities, and
 financially vulnerable consumers deserve, but do not consistently receive,
 equal treatment in the credit markets. Although today's action addresses
 the denial of credit to deserving, hard working families, other secondary
 market practices, such as the securitization of predatory loans, have
 played a direct role in the current foreclosure crisis. NCRC is actively
 looking at other legal, as well as programmatic ways to redress those
 actions.
 
     "It's shocking that industry leaders like Morgan Stanley are struggling
 financially because they peddled problematic loans with exploding interest
 rates, pre-payment penalties and exorbitant fees to more financially
 vulnerable consumers, while failing to lend to more traditional borrowers,"
 said Taylor.
 
     The complaint states that Morgan Stanley's lending policies contain
 three discriminatory types of exclusion, often characterized as
 "redlining." The first type includes policies that restrict the
 availability of loans by requiring applicants to satisfy minimum property
 values. These policies, for example, prevent many borrowers whose homes are
 valued at less than $100,000 from obtaining a loan from Morgan Stanley,
 regardless of their credit worthiness. The second type of discrimination
 includes policies that deny loans to residents of Puerto Rico, Guam and the
 Virgin Islands, while the third type prohibits lending to Native American
 communities.
 
     The complaint, which will be available at www.NCRC.org, illustrates the
 impact of these policies using demographic maps.
 
     NCRC contends in the complaint that there is no legitimate business
 justification for any of Morgan Stanley's discriminatory lending policies.
 Under Morgan Stanley's minimum property value policies, applicants who meet
 traditional lending criteria, such as a strong FICO or other credit score,
 steady income, significant assets, and low loan-to-value ratios, are
 excluded from consideration for a mortgage loan based solely on the value
 of their home or the home they are purchasing. Likewise, under its other
 restrictive policies, Morgan Stanley automatically rejects applicants and
 loans on the secondary market based solely on the applicant's location
 without regard to traditional lending criteria.
 
     "NCRC is asking HUD and the SEC to investigate our complaint and issue
 injunctive relief prohibiting Morgan Stanley and its divisions and
 affiliates from selling, buying, investing in, serving as a trustee, or
 otherwise participating in any pooling and servicing agreements involving
 mortgage loans underwritten from using the discriminatory lending policies
 identified in the complaint" stated David Berenbaum, Executive Vice
 President of NCRC.
 
     Consumers who believe that they have been victimized by discriminatory
 lending practices may contact NCRC's civil rights staff either on-line at
 www.NCRC.org or by calling 800-475-NCRC.
 
     NCRC is a national non-profit membership organization that promotes
 economic justice and equal access to credit, capital and financial services
 to traditionally underserved communities. It has nearly 600 dues-paying
 organization members across the country. For more information on NCRC,
 visit us on line at www.ncrc.org or call 202-628-8866.
 
 
 
 
 

SOURCE National Community Reinvestment Coalition