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HOMECOMINGS FINANCIAL, LLC, ) CLASS ACTION COMPLAINT
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Defendant. ) JURY TRIAL DEMANDED
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CLASS ACTION COMPLAINT
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Plaintiffs Rush Watson, II, and Geretta Watson (“Watsons”) bring this
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action against Homecomings Financial, LLC (“Homecomings”), on behalf of
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themselves and all others similarly situated, and allege on information and
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belief as follows:
INTRODUCTION
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Equal Credit Opportunity Act, 15 U.S.C. § 1691, et seq. (“ECOA”), the Fair
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Housing Act, 42 U.S.C. § 3601 et seq. (“FHA”) and the Civil Rights Act, 42
U.S.C. § 1981, § 1982 et seq. (“CRA”). Plaintiffs seek remedies for themselves
and the Class (defined in ¶ 34, below) for the discriminatory impact of
using objective criteria (e.g., the individual’s credit history, credit score, debt-
THE PARTIES
Alabama 36693.
incorporated under the laws of the State of Delaware, with its headquarters
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and principal place of business at 8400 Normandale Lake Blvd. Suite 250,
FACTUAL ALLEGATIONS
borrowers are not mere happenstance, but instead result from a systematic
and predatory steering of African Americans into less favorable loans. African
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substantial information about its loan programs, rates and credit criteria, as
well as its policies for compensating mortgage brokers who arrange business
for it.
on its behalf, quote financing rates and terms (with limitations set by
Homecomings advances the funds to make the loans and bears some or all of
mortgage transactions.
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customer.
score.
“rate sheets.” Such rate sheets are published by Homecomings via facsimile
and internet.
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rate mark-up, Homecomings shares the additional income with the broker.
component of the total finance charge (the “Contract APR”), without the
related charge.
persons with identical or similar credit scores to pay different amounts for
designed to charge persons with the same credit profiles different amounts of
finance charge, the objective qualities of the initial credit analysis used to
calculate the Par Rate are undermined and the potential for race bias
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(insofar as Homecomings uses the same or effectively the same policy for all
of other mortgage companies that use credit pricing systems structured like
policy.
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subjective pricing policy that it knows or should have known has a significant
unrelated to race, but, instead, are the direct causal result of the use of the
discriminatory impact.
26. Plaintiffs Rush Watson, II and Geretta Watson own their own
their home, they met with a broker from Americas EZ Mortgage, Inc. The
Watsons met with the broker on several occasions (in person and
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inflated interest rate on their loan. Generally, the greater the interest rate
on a mortgage loan is inflated above the “par interest rate,” the greater the
yield spread premium Defendant offers to pay the broker. Therefore, had
there been no yield spread premium paid, the interest rate on Plaintiff’s loan
would have been lower. The yield spread premium Defendant offers to pay
brokers incentivizes brokers to “sell” loans with inflated interest rates and
Because of the yield spread premiums offered, Plaintiffs and other members
of the Class were far more likely to be steered into loans with less favorable
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terms (i.e., high interest rates and points) than their non-minority
counterparts.
persons under Rules 23(a) and (b)(2)-(3) of the Federal Rules of Civil
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35. Excluded from the Class are (1) Defendant, any entity or division
whom this case is assigned and any member of the judge’s immediate family;
and (3) claims for personal injury, wrongful death and emotional distress and
the proposed Class, since such information is in the exclusive control of the
been subject to and affected by the same discretionary pricing policy. There
are questions of law and fact that are common to the Class, and predominate
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over any questions affecting only individual members of the Class. These
pricing policy;
in its impact;
and
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40. Typicality: The claims of the named Plaintiffs are typical of the
claims of the Class and do not conflict with the interests of any other
members of the Class in that both the Plaintiffs and the other members of the
Class were subjected to the same discretionary pricing policy that has
Plaintiffs’ claims will inure to the benefit of the entire proposed class.
represent the interests of the Class. Plaintiffs are committed to the vigorous
prosecution of the Class’s claims and have retained attorneys who are
Neither Plaintiffs nor counsel have any interest adverse to those of Class
members.
the issues in this case does not create any problems of manageability.
as a whole.
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COUNT ONE
Violation of the Equal Credit Opportunity Act
15 U.S.C. § 1691, et seq.
and profited from the discriminatory policy and practice alleged herein (the
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COUNT TWO
Violation of the Fair Housing Act
42 U.S.C. § 3601, et seq.
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57. Plaintiffs and the Class are aggrieved persons as defined in the
COUNT THREE
Violation of the Civil Rights Act
42 U.S.C. § 1981, § 1982
Plaintiffs and the class by charging them higher interest rates than those
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of this statute, Plaintiffs and the class are entitled to the requested relief
1981 and 1982, and 42 U.S.C. § 3613, the acts and practices of Defendant
complained of herein are in violation of the ECOA, the FHA, and the CRA;
§ 1691e(c), 42 U.S.C. §§ 1981 and 1982, and 42 U.S.C. § 3613(c), enjoining the
members of the Class because of their race through further use of the
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42 U.S.C. §§ 1981 and 1982, and 42 U.S.C. § 3613(c), to adopt and enforce a
policy that requires appropriate training of the Defendant’s employees and its
42 U.S.C. §§ 1981 and 1982, and 42 U.S.C. § 3613(c), to monitor and audit the
1981 and 1982, and 42 U.S.C. § 1981, that Defendant must disgorge, for the
benefit of the Class, all or part of its ill-gotten profits it received from
9. Other and further relief as this Court finds necessary and proper.
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