From the NY Daily News:
A federal judge yesterday green-lighted a discrimination suit by eight black home buyers who say shady real estate brokers, lawyers, appraisers and subprime lenders duped them into buying rundown Brooklyn houses at inflated prices.
The victims of the alleged scheme say they were sold houses in Bedford-Stuyvesant, Bushwick and Brownsville – some at more than $100,000 over their actual value – after responding to ads for United Homes in the Daily News and on subway billboards.
They say the ads – which always featured minority families and the tagline “We can Make a Dream Come True” – targeted them because they were financially inexperienced.
Now, several of the first-time home buyers are in foreclosure on their mortgages.
The plaintiffs allege United Homes representatives would show them decrepit homes – some of which they likened to “crack houses” – and promise to fix them up.
The company would then organize an appraiser to value the home and an attorney to “help” home buyers look over their contracts and pressure them into signing, they say.
The real estate broker would also set them up with a lender, who they claim allowed them to take on subprime mortgages they couldn’t afford.
After closing, the plaintiffs say they discovered that many of the promised repairs had not been finished and that the value of the home was substantially less than what the appraiser had told them it was worth.