U. S. SUPREME COURT RULES ON IMPACT THE FAIR HOUSING ACT (FHA) COULD HAVE ON LENDERS
The Fair Housing Act (FHA) prohibits intentionally lending to minority borrowers on worse terms than equally creditworthy nonminority borrowers – and – inducing defaults by failing to extend refinancing and modifications to minority borrowers on fair terms. The City of Miami filed suit against Bank of America Corp. and Wells Fargo & Co. claiming (i) the named Banks violated those prohibitions and (ii) that conduct caused the City “Foreseeable” harm.
On May 1, 2017, the U.S. Supreme Court handed down a 5-3 decision and clarified that “Foreseeability” of damages under FHA is not enough. The Court’s opinion establishes that the City will be required to show that the claimed damages were “proximately caused” by the violation of the FHA. The Court recognizes that Congress did not intend the FHA to provide a remedy for “ripples of harm” that may flow from a violation of the FHA. The majority establishes that the FHA requires some direct relation between the injury asserted and the conduct alleged. The Court was unwilling to draw “precise boundaries,” which the City will now be required to establish on remand. The City has its work cut out.
SHD Legal Group P.A.’s Managing Shareholder was contacted by DS News regarding the ruling. See full article. http://www.dsnews.com/daily-dose/05-01-2017/supreme-court-determines-cities-can-sue-banks-foreclosure