A D.C. based nonprofit is suing a Kansas City, Mo.-based mortgage company for allegedly discriminating against minorities seeking housing in Baltimore.

National Community Reinvestment Coalition is seeking unspecified damages from NovaStar Financial Inc. in a lawsuit filed in D.C. District Court.

The lawsuit alleged that NovaStar’s policy to not underwrite loans in row house neighborhoods in Baltimore discriminates against African-Americans and Latinos who reside there. It also claims it has a policy that treats Indian reservation properties and adult foster care sites as unacceptable for its lending business.

“There’s no legitimate underwriting explanation for their policy,” said David Berenbaum, NCRC’s executive vice president, Thursday.

This story continues below
Advertisement

NCRC has a number of similar complaints filed against other companies with anti-row house policies in urban areas, Berenbaum said.

NovaStar spokesman Richard Johnson said the company believes the suit is “completely without merit,” and will defend it vigorously.

The company has a policy against the row houses because there has been a history of fraud in Baltimore when it comes to their appraisals, Johnson explained. It shies away from Indian reservations because there are different laws governing the properties, and does not include adult care homes because as a residential lender, it considers them more of a business.

Melissa.Frederick@dcexaminer.com