Second Circuit – Fair Housing Act: Jean Robert Saint-Jean etal. v. Emigrant Mortg. Co. Inc. et al.

United States Court of Appeals for the Second Circuit

Fair Housing Act — Reverse redlining — Equitable tolling

Jean Robert Saint-Jean etal. v. Emigrant Mortg. Co. Inc. et al.

22-3094-cv

Judges Chin, Park, and Robinson

Background: Eight black homeowners sued the defendants alleging that the lender violated antidiscrimination laws by making mortgage refinancing loans at extraordinarily high default interest rates to Black and Latino individuals in poor neighborhoods who had no income, no assets, and low credit scores, but high equity in their homes, and then foreclosing on the loans when the individuals defaulted. The defendants appealed from a jury verdict in favor of the plaintiffs.

Ruling: The Second Circuit affirmed. The court held there was no abuse of discretion in holding that the plaintiffs’ claims were timely under the doctrine of equitable tolling under the discovery rule. Furthermore, the release-of-claims provisions contained in a loan modification agreement was unenforceable as a matter of law because it contravenes public policy against broad waivers of claims in mortgage transactions.

Lila R. Miller, of Relman Colfax, for the plaintiffs-appellees; Matthew A. Schwartz, of Sullivan & Cromwell, for the defendants-appellants.

Oral argument audio