A Staten Island homeowner has filed a federal lawsuit against Barclays, alleging predatory lending that targeted minority borrowers in New York City.
Homeowner Tony Wong’s suit alleges that the giant British bank “ignored standard underwriting guidelines and peddled predatory subprime loans” to minority New Yorkers. Wong trusted his broker, but at the closing discovered he was signing up for a $361,250 subprime loan with an 11.075 percent interest rate from Barclays’ EquiFirst subprime lending unit. He has tried to work out a modification but is now in foreclosure, owing $663,783 on a property valued at $345,000.
The suit, filed in New York federal court, alleges that Barclays violated the Fair Housing Act and the Equal Credit Opportunity Act, and has been “unjustly enriched” by fees from the securitization of loans and the sale of corresponding securities.
The complaint details allegations of widespread harm to minority borrowers in metro New York. Barclays subsidiary EquiFirst originated 620 new residential mortgages in 2007 in the metro area, including 410, or 66 percent, in neighborhoods with more than 50 percent minority populations.
Barclays declined to comment.