Apr 17
News.Yahoo

A Hispanic homeowner sued Lehman Brothers Bank on Thursday, accusing the lender of charging minority mortgage applicants higher fees and interest rates than white customers.

Pedro Rivas, who described himself as a Latino homeowner living in Pecoima, California, filed suit in U.S. District Court in Manhattan, charging the wholly owned unit of Lehman Brothers Holdings Inc with implementing a policy that causes "minority borrowers to pay subjective fees such as yield spread premiums and other mortgage-related finance charges at higher rates than similarly situated non-minority borrowers."

Rivas said Lehman's "pattern of discrimination is not the result of random or non-discriminatory factors. Rather it is the direct and intended result of defendants' business model and loan-funding practices."

Lehman Brothers spokesman Brian Finnegan declined to comment.

Rivas, who is seeking class-action status for the lawsuit, said in the filing that "minorities who borrowed from defendants between 2004 and 2006 were nearly 50 percent more likely than Caucasian borrowers to have received a high-APR (annual percentage rate) loan to purchase or refinance their home."

Rivas said that while Lehman's initial risk analysis applied objective criteria to set a loan's rate, its "discretionary pricing policy authorizes and provides incentives to their loan officers, mortgage brokers and correspondent lenders to mark up that rate later ..."

Last June, Rivas received two loans from Lehman totaling $435,000 to buy his home. He paid origination fees totaling $6,525 and other feels totaling $1,250.

"These fees were higher than fees charged by Lehman Brothers Bank to non-minority borrowers with objective credit risk factors similar to Plaintiff Rivas," the suit said.