COMPLAINT | County of Cook v. HSBC North America Holdings, Inc. et al | Defendants Discriminated Against FHA Protected Minority Borrowers In Originating Predatory Mortgage Loan Products
UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS
COUNTY OF COOK, Plaintiff, vs. HSBC NORTH AMERICA HOLDINGS INC., HSBC FINANCE CORPORATION, HSBC MORTGAGE CORPORATION (USA HSBC MORTGAGE SERVICES INC., HSBC USA INC., HSBC BANK USA, NATIONAL ASSOCIATION, BENEFICIAL COMPANY LLC, DECISION ONE MORTGAGE COMPANY, LLC, HFC COMPANY LLC Defendants. Table of Contents Introduction ……………………………………………………………………………………..3 Jurisdiction & Venue …………………………………………………………………………...13 Parties ……………….……………………………………...……………………………….….14 Facts ………………………………………………………………………………………..…..16 A. Defendants Intended to Engage in Predatory & Discriminatory Lending to Drive Growth ….……………………………………………………………………….16 B. The Federal Government Has Found That Discrimination Was Pervasive In Subprime Mortgage Lending During 2003 Through 2007……………………..............18 C. Defendants Discriminated Against FHA Protected Minority Borrowers In Originating Predatory Mortgage Loan Products ……………………………………….23 i. Defendants Targeted Marketing To Minorities……………….………..27 ii. Defendants Used Discretionary Pricing Policies……………….….…...36 iii. Defendants Used Uniform Underwriting Policies…………….………..40 iv. Defendant, Decision One, Used Discriminatory Appraisal & Override Practices ………...……………………………………………………42 v. Defendants Enforced And Incentivized Their Discriminatory Pricing, And Underwriting Appraisal Policies Through Employees ....………………....44 vi. Empirical Data Evidences Defendants' Discriminatory Practices .....…..45 D. Defendants' Fostered, Enabled And Otherwise Encouraged Discrimination Against FHA Protected Minority Borrowers In Predatory Loan Products Originated Within Defendants' Wholesale Channel Of Broker And Correspondent Lenders…………………………………………………………………..…….........…..47 E. The Securitization Model, Corporate Structure & MERS: Linchpins To Defendants' Predatory & Discriminatory Lending Scheme..………………….....…….58 i. Defendants' Structure Isolated & Concealed Risk .…………….…….. 60 ii. Defendants Concealed & Obfuscated Liability with MERS......……….65 iii. Defendants Passed Financial Risks to Third Parties With Securitization…………………………………………………………………...68 iv. Defendants' Subprime & Securitization Caused The Financial Crisis....72 F. Predatory & Discriminatory Lending Caused the Foreclosure Crisis …….……….76 G. The Foreclosure Crisis Disparately Impacts Minorities ………………………….. 83 H. Defendants' Continuing Mortgage Servicing & Foreclosure Practices Are Predatory and Discriminatory ……………………………………………….……….. 88 I. Defendants' Predatory & Discriminatory Mortgage Lending, Servicing & Foreclosure Practices Have Injured the Plaintiff ………………........…….……...….. 96 Cause of Action (Federal Fair Housing Act) ………………………………………….......…104 Demand for Jury Trial ………………………………………………………………….……. 107 Prayer for Relief ……………………………………………………………………….……. 107 [...]