The Dallas equity firm Lone Star Funds is being sued by a group of four black homeowners in New York who say the company misled them about their mortgages. The Dallas Morning News staffer Julieta Chiquillo reports on the lawsuit filed last week, which also targets the U.S. Dept. of Housing and Urban Development (HUD) for its sale of delinquent mortgages backed by the federal government to private investors like Lone Star.

While Loan Star's mortgage servicer Caliber Home Loans calls the case without merit, it is possible to win a lawsuit like this one against a lender on the basis of racial discrimination:

Yes. The U.S. Supreme Court has upheld that a government agency or a company can be held liable for a practice that disproportionately harms a minority, even if the bias was unintentional. (The legal doctrine is referred to as disparate impact, and its affirmation by the Supreme Court originated from a case in Dallas.)

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