The National Community Reinvestment Coalition has filed a lawsuit against the subprime lender NovaStar, charging that the company discriminated against minorities wanting to buy row houses and individuals wanting to buy adult foster care for people with disabilities.Filed in U.S. District Court in Washington, the suit also charges that NovaStar refused to make loans to American Indians on reservations. While the lawsuit does not allege predatory lending by NovaStar, NCRC president and chief executive John Taylor said he found it "ironic that NovaStar was peddling loans with exploding interest rates and exorbitant fees to minorities in more traditional neighborhoods" while denying credit to other borrowers who qualified for loans. The NCRC says the suit represents the first time that the Federal Fair Housing Act has been used to bring charges of civil rights violations against lenders for refusing to make loans for row houses and adult foster care facilities. A media relations representative for NovaStar said the company had not received the lawsuit, but that "We believe the accusations in it are completely without merit, and we will defend against this lawsuit very vigorously."
