DiCello Levitt and Co‑Counsel Move Forward with Injunctive Class Alleging Discrimination in the Home Loan Market
WASHINGTON — In a significant appellate ruling for minority borrowers seeking systemic relief, the U.S. Court of Appeals for the Fourth Circuit today revived class allegations challenging Navy Federal Credit Union’s mortgage lending practices. The Court held that borrowers alleging discriminatory mortgage lending practices plausibly asserted common, class-wide claims for injunctive and declaratory relief that should not have been dismissed at the pleading stage before discovery.
“This ruling reaffirms that courts should not shut down civil rights cases before plaintiffs have any opportunity to access the evidence,” said Partner Daniel Schwartz, who argued the appeal on behalf of the borrowers. “The apparent disparate impact is there for all to see—black and brown borrowers at Navy Federal were denied home mortgages far more often, and charged significantly higher rates, than similarly-situated white applicants. When a lender’s mortgage decisions are allegedly driven by a common underwriting process, plaintiffs are entitled to discovery to determine whether that system operates in a manner that causes a discriminatory result.”
The consolidated case, In re: Navy Federal Mortgage Discrimination Litigation, alleges that Navy Federal employed a semi‑automated mortgage underwriting process that disadvantaged Black, Latino, and Native American home loan applicants, including service members, veterans, and their families. According to the complaint, the underwriting system relied on inputs that can function as proxies for race and produced disparate outcomes in mortgage approvals, pricing, and processing times nationwide.
“The Fourth Circuit recognized that claims of systemic discrimination deserve to be evaluated on a full factual record,” said DiCello Levitt Founding Partner Adam Levitt. “Our clients allege that Navy Federal’s mortgage lending practices denied them equal access to homeownership. This decision ensures those claims will be tested through discovery rather than dismissed at the outset.”
The case now returns to the U.S. District Court for the Eastern District of Virginia for further proceedings, including discovery into Navy Federal’s mortgage underwriting practices.
The case is In re: Navy Federal Mortgage Discrimination Litigation, Case No. 1:23‑cv‑01731‑LMB‑WEF (E.D. Va.). DiCello Levitt serves as Co-Lead Counsel in the matter with Tycko & Zavareei and Ben Crump Law.
About DiCello Levitt
At DiCello Levitt, we’re dedicated to achieving justice for our clients through class action, civil and human rights, antitrust, environmental, mass tort, securities, financial services, business-to-business, public client, personal injury, and whistleblower litigation. Our lawyers are highly respected for their ability to litigate and win cases—whether by trial, settlement, or otherwise—for people who have suffered harm, global corporations that have sustained significant economic losses, and public clients seeking to protect their citizens’ rights and interests. Every day, we put our reputations—and our capital—on the line for our clients.
DiCello Levitt has achieved top recognition as Plaintiffs Firm of the Year and Trial Innovation Firm of the Year by the National Law Journal, in addition to its top-tier Chambers and Benchmark ratings. For more information about the firm, including recent trial victories and case resolutions, please visit www.dicellolevitt.com.
Media Contact
Caitlin Whitehurst
Director of Communications, DiCello Levitt
cwhitehurst@dicellolevitt.com
