Horne v. Harbour Portfolio Vi, Lp

304 F. Supp. 3d 1332 (2018)

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Nature of the Case

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Facts

D purchased all, or nearly all, of its properties from Fannie Mae's portfolio of 'real estate owned' properties, which are homes that went through foreclosure but were not purchased by third parties. Most of the homes were in poor or uninhabitable condition, but no repairs were made prior to selling them via the CFDs. Ds marked up the sale price of the home to four or five times their purchase price. The interest rates were 9.9% or 10% over a 30-year period. The CFDs put the burden of home repairs, maintenance, property taxes, and homeowner's insurance on the buyer. The contract also contained a forfeiture clause giving Ds the right, upon default, to elect to cancel the contract, keep all amounts paid, and evict the buyer. Ps alleged in part that Ds engaged in reverse redlining, the practice of issuing subprime loans to minority communities. Ps claim that Ds purchased homes located in communities that are majority African-American and designed a marketing scheme to draw primarily African-American buyers. Ds advertised by placing signs in front of the properties and through word of mouth. Thus, the people most likely to see the signs or hear about the properties were those already in the neighborhoods, the majority of whom were African-Americans. Ps have no direct evidence but rely on statistics. Ps have brought claims against the Harbour Defendants under the Fair Housing Act, the Equal Credit Opportunity Act, the Georgia Fair Housing Act, the Truth in Lending Act, the Georgia Fair Business Practices Act and the Unfair and Deceptive Practices Towards the Elderly Act, and the Georgia Residential Mortgage Act, and for equitable mortgage, declaratory judgment, unjust enrichment, and malicious eviction. In Georgia counties, Fannie Mae homes were in 71 percent Black neighborhoods while non-Fannie Mae foreclosed homes were in 48 percent Black neighborhoods. From this P’s claim disparate impact. Ds have filed a motion to dismiss.