Tag Archives: Fair Housing Act

Bank of America Accused of Racial Discrimination in 30 U.S. Metropolitan Areas and 201 Cities

Civil Rights Groups File New Evidence of Housing Discrimination in Federal Complaint Alleging Neglect of Foreclosures in Communities of Color.

WASHINGTON, Aug. 31, 2016 /PRNewswire/ — Today, the National Fair Housing Alliance (NFHA) and nine local fair housing organizations filed an amended discrimination complaint against Bank of America (BoA).  The complaint alleges illegal discrimination by BoA in African American and Latino neighborhoods in six additional cities.  This new evidence of discriminatory treatment by BoA will be added to the federal Fair Housing Act complaint on file with the U.S. Department of Housing and Urban Development.  Furthermore, NFHA and the nine fair housing organizations added new evidence to their existing claims.  The six additional cities are:  Columbus, OH; Gary, IN; Minneapolis, MN; Newark, NJ; Tampa, FL; and neighborhoods in suburban Detroit.

NFHA and the nine fair housing organizations investigated an additional 399 Bank of America foreclosures and found that BoA continues its failure to properly maintain foreclosed properties in African American and Latino neighborhoods.  This new evidence formed the basis of the amended complaint.  The complaint is now comprised of evidence from 1,267 BoA properties in 30 metropolitan areas and 201 cities throughout the United States.

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First Federal Bank of Kansas City reaches $2.8 million settlement for redlining

First Federal Bank of Kansas City agreed to a $2.8 million settlement over charges that the bank excluded minority neighborhoods from its lending service area, a practice commonly known as redlining.

According to the Department of Housing and Urban Development, First Federal Bank of Kansas City allegedly redlined several neighborhoods where the majority of the residents are African-American, thereby limiting residential mortgage lending to persons based upon their race, which is a violation of the Fair Housing Act.

The settlement agreement stems from two complaints filed on Oct. 5, 2015 by two fair housing groups that accused First Federal Bank of Kansas City of redlining.

The groups, the nonprofit organizations Metropolitan St. Louis Equal Housing and Opportunity Council and Legal Aid of Western Missouri, alleged that the bank’s lack of market penetration in African-American communities in the urban core (East Side) of Kansas City, Missouri made residential real estate products less available to people based on race.

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First Tennessee Bank reaches $1.9 million settlement over discriminatory lending

For the second time in just over six months, First Tennessee Bank, the regional bank for First Horizon National, is settling with the federal government over allegations that it violated U.S. lending laws.

In June 2015, First Tennessee Bank agreed to pay $212.5 million to resolve allegations that it violated the False Claims Act by “knowingly originating and underwriting mortgage loans insured by the Federal Housing Administration that did not meet applicable requirements.”

That settlement resolved allegations that First Tennessee failed to comply with FHA origination, underwriting and quality control requirements.

As part of the settlement, First Tennessee admitted that from January 2006 through October 2008, it “repeatedly certified” for FHA insurance mortgage loans that did not meet the Department of Housing and Urban Development’s underwriting requirements.

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Supreme Court: Fair Housing Act claims can use “disparate impact”

In a blow to the housing and mortgage finance industry but a victory for fair housing advocates, the Supreme Court ruled in a contentious and qualified opinion that the legal doctrine of “disparate impact” is cognizable under the Fair Housing Act.

The 5-4 decision holds that there is a disparate impact claim under the FHA as a matter of statutory interpretation.

The majority opinion, which can be read here and which was written by Justice Anthony Kennedy, strongly cautions that remedial orders in disparate impact cases that impose racial targets or quotas could be unconstitutional.

The question in the case of Texas Department of Housing and Community Affairs v. Inclusive Communities Projectsis whether the Fair Housing Act allows lawsuits based on disparate impact – that is, an allegation that a law or practice has a discriminatory effect, even if it wasn’t based on a discriminatory purpose. The Court had granted review to consider this question in two earlier cases, but both of those cases settled before the Court could rule on them.

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Housing Enforcement Group Sues M&T Bank for Discrimination

One of the nation’s largest banks discriminates against black, Latino and Asian homebuyers by offering lesser qualified white borrowers higher loan amounts and using hidden racial criteria in one of its loan programs, according to a lawsuit filed this week in federal court in Manhattan. The suit also accuses the bank of steering homebuyers to certain neighborhoods based on their race or ethnicity.

The lawsuit claims that M&T Bank violated the landmark Fair Housing Act, a 1968 law that sought to end discriminatory lending practices and limit the historic segregation of many of the country’s cities. The suit was filed by the Fair Housing Justice Center, a New York City-based non-profit organization that is funded by the U.S. Department of Housing and Urban Development to enforce the federal law that bans housing discrimination.

Between 2012 and 2014, the Fair Housing Justice Center conducted a series of tests in which it sent out trained actors to explore whether white and non-white homebuyers would be treated differently when trying to prequalify for a mortgage. All followed a similar script, telling bank officers they were married with no children and were first-time homebuyers. The black, Latino and Asian testers presented slightly better qualifications when it came to income, credit and additional financial assets.

In nine separate interactions recorded either with a camera or an audio devices, employees at M&T Bank’s New York City loan office can be seen or heard treating the white applicants differently than the others, according to the suit. In one instance, a black candidate was told she did not have enough savings to buy a home. A white applicant with slightly lower income and credit scores and $9,000 less in savings was pre-approved for a loan. In another case, a Latina candidate was told she would qualify for a mortgage $125,000 less than the test’s white candidate with lower income, poorer credit and less cash.

“Defendant’s conduct, as described above, constitutes discrimination in making available residential real estate-related transactions and in the terms and conditions of such transactions on the basis of race or national origin in violation of the Fair Housing Act,” the lawsuit says.

A complaint against a lender based solely on secret testing is quite unusual. Several fair housing experts could not think of another case. Because lawsuits against banks typically results from statistical disparities, whistleblowers or consumer complaints, this case could open up a new legal means of pursuing discriminatory lenders.

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New York AG to SCOTUS: Uphold disparate impact in housing

This week the Supreme Court of the United States ishearing the case of Texas Dept. of Housing vs. Inclusive Communities Project, and while many in the industry welcome the expected rejection of disparate impact theory in housing, others oppose overturning its use.

In this case, the Texas Department of Housing argues that the text and history of the law confirm that it does not allow disparate impact claims, but instead authorizes only claims based on intentionally discriminatory conduct. In October, the high court agreed to hear the case that could overturn the Obama administration’s position.

New York Attorney General Eric T. Schneiderman says he supports upholding disparate impact in the interpretation of the federal Fair Housing Act. Last year, he led a coalition of 16 other states in filing a brief defending the theory.

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Brooklyn co-op charged with discriminating against disabled veteran

A Brooklyn cooperative development is in hot water with the U.S. Department of Housing and Urban Development for refusing to allow a disabled veteran to keep an emotional support dog and threatening the veteran and his wife with eviction in retaliation for filing a fair housing complaint.

HUD is charging Trump Village IV, a 1,144-unit Coney Island co-op, and Igor Oberman, the president of the Trump Village IV board of directors, with violating the rights of Eugene Ovsishcher, a combat veteran with a psychiatric disability, and his wife, Galina.

According to HUD, the Trump Village IV (pictured above, source: TrumpVillageRealty.com) has a “no pets” policy, but the Ovsishchers applied for a waiver to that policy in August 2011 so that they could keep an emotional support dog, based on the recommendation of Eugene’s psychiatrist and primary care physician.

Despite providing a copy of the dog’s picture, license and a letter from Ovsishcher’s doctor explain the medical need for the dog in February 2012, the Trump Village sent the couple a letter demanding the removal of the dog, and warning that a failure to comply would result in the termination of the couple’s lease.

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