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Predatory Loans Lawsuit Alleges Discrimination in Atlanta

Contract-for-deed mortgages, which don't give home buyers ownership of a home until they pay off the entire loan, are legal, but a lawsuit alleges the ones made by Harbour Portfolio Advisors violated the Fair Housing Act.
April 27, 2018, 8am PDT | Casey Brazeal | @northandclark
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Zachary Anderson thought he owned his home. He'd signed a contract, made a down payment, done extensive maintenance, and paid all the taxes on his house from the day he purchased the house onward. But, when he tried to get his property taxes lowered he found out that the owner of the home was a private equity group called Harbour Portfolio Advisors.

Anderson is one of a number of plaintiffs in a lawsuit against Harbour Portfolio Advisors for violation of the Fair Housing Act. He and others entered into a contract-for-deed agreement, which works like a rent-to-own agreement meaning the money they don't own their homes. "If he misses one payment, thus violating the agreement, he can be evicted, losing all the equity he put into the home," Alana Semuels writes in the Atlantic.

While these arrangements are legal, the suit alleges that Harbour Portfolio Advisors was discriminatory in it's targeting of African Americans for these loan products. "Though the Fair Housing Act was initially aimed at prohibiting behaviors like redlining that prevent minorities from ending up in certain neighborhoods, a series of lawsuits in recent decades have led to another type of discrimination being prohibited under the law," Semuels reports. Marketing loans that have been called predatory, is a phenomenon known as "reverse redlining."

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Published on Tuesday, April 10, 2018 in The Atlantic
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