COMPLAINT | Adkins et al. vs. Morgan Stanley - A.C.L.U. to Sue Morgan Stanley Over Mortgage Loans

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A.C.L.U. to Sue Morgan Stanley Over Mortgage Loans

A.C.L.U. to Sue Morgan Stanley Over Mortgage Loans

ACLU has implied they are looking at other lenders and many other law suits may follow.

NYT-

The American Civil Liberties Union is accusing Morgan Stanley of fueling the production of risky, expensive loans that targeted African-American borrowers.

In the lawsuit, expected to be filed on Monday, the A.C.L.U. claims that Morgan Stanley is culpable for predatory loans made through the New Century Financial Corporation because the investment bank lent billions of dollars to New Century, a now-defunct subprime lender, and pressured it to make troublesome loans to African-American borrowers who could not afford them.

Morgan Stanley packaged the loans made by New Century and sold them to pension funds and other large investors. But, the lawsuit claims, the bank went beyond the traditional role of an investment bank by requiring that the mortgage company churn out the wildly profitable loans that came with “dangerous” characteristics.

[NEW YORK TIMES]

[ipaper docId=110070660 access_key=key-1r2rbi8vvohsxuhf4mw4 height=600 width=600 /]

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