Predatory lending lawsuit against Morgan Stanley moves forward, the suit involves Detroit homeowners
A federal judge ruled this week that a lawsuit accusing investment banking giant Morgan Stanley of predatory lending in Detroit can move forward.
The lawsuit alleges Morgan Stanley pushed sub-prime mortgage lenders to target Detroit neighborhoods with large minority populations.
Morgan Stanley later packaged the ‘high risk’ loans into ‘mortgage backed securities’
“This case illustrates the role that corporate greed played in creating the conditions in Detroit that led to the bankruptcy,” says Michael Steinberg, an attorney with the American Civil Liberties Union of Michigan.
The lawsuit is seeking millions of dollars from Morgan Stanley.
The case is still early in the discovery process, so an actually trial if there is one, could be several years away.
A Morgan Stanley spokesman declined comment on the judge’s ruling.