On September 30, 2022, the United States filed an “election” complaint in United States v. Louis Liberty & Associates, PLC, et al. (N.D. Cal.). The complaint alleges that the defendants discriminated on the basis of national origin in violation of the Fair Housing Act (FHA) by targeting Hispanics for predatory loan modification services. Louis A. Liberty and Barney Diamos are also named as a defendant in the case. The case was referred to the Division after the U.S. Department of Housing and Urban Development (HUD) received a complaint, conducted an investigation, and issued a charge of discrimination.
Case Open Date: Friday, September 30, 2022
Case Name: United States v. Louis Liberty & Associates, PLC, et al.
Tags: The House Lawyer; Barney Diamos; Fair Housing Act; FHA; Hispanic; Spanish; English; single-family home; THL; The Loan Negotiator Group
Industry Code: None
Component: Civil Rights Division
Civil Rights – Housing and Civil Enforcement Section
Case Documents: Complaint – United States v. Louis Liberty & Associates, PLC, et al. (N.D. Cal.)
The Defendant in this case, is – something you don’t see every day – a law firm. It’s a good example that you don’t have to own/manage housing or provide mortgages to be covered by the Fair Housing Act. If you or your company are in a business that provides housing, provides the funding for housing, or affects the funding for housing, you can be found to have violated the FHA.
The DOJ alleges in this case that the Defendant’s law firm intentionally sought out Hispanic mortgage holders with the promise of assisting them with obtaining loan modifications from their lender. Most of the firm’s ads were in Spanish and featured on Spanish radio and television stations. As a result, a large majority of the firm’s clients were Hispanic, and many didn’t speak English. The firm charged fees in excess of $1,500 for this service, as well as a $50 monthly service charge.
Some of the firm’s clients who filed the fair housing complaint reported that they contacted the firm after seeing an advertisement and were told that the firm could obtain loan mods for them, even in cases where the client was not even eligible for a loan modification. Clients were instructed to stop paying their mortgages in order to make them eligible for a modification, putting them at risk of foreclosure, as well as not to interfere with the negotiations by contacting their lender at any time. The firm allegedly did not contact its clients to inform them when their loan modification applications had been denied and then suddenly disengaged its services with no prior notice.
These actions, if true, would be illegal regardless of whom Defendants decided to defraud. However, the fact that the firm allegedly targeted individuals based on their national origin brought it under the broad scope of the FHA. This is an interesting case that serves as a reminder that no firm is above the law.