MORTGAGE LENDING UPDATE

By David Griffin
Past President of Mortgage Bankers Association of Middle Georgia

FAIR HOUSING

I’m sure you’ve seen the excellent public service announcement in which a man seated at a desk viewing a newspaper’s classified ad section repeatedly calls the same landlord’s telephone number.   Each time he calls, he uses a different ethnic accent and name.   Juan Hernandez, Sanjay Kumar, Tyrone Washington, etc.   Each time he is told that the apartment in question is “not available”.  The PSA ends with the man using a cultured and somewhat aristocratic accent, Graham Wellington as his name and his being told that the apartment is, in fact, available for him to see.  The PSA ends with following information: “Fair housing. It's not an option. It's the law.  1-800-669-9777  www.fairhousinglaw.org”   The law mentioned is the Fair Housing Act.

The Department of Housing and Urban Development (HUD) has played a lead role in administering the Fair Housing Act since its adoption in 1968. The 1988 amendments, however, have greatly increased the Department's enforcement role. First, the newly protected classes have proven significant sources of new complaints. Second, HUD's expanded enforcement role took the Department beyond investigation and conciliation into the area of mandatory enforcement.

The Fair Housing Act covers most housing. In some circumstances, the Act exempts owner-occupied buildings with no more than four units, single-family housing sold or rented without the use of a broker, and housing operated by organizations and private clubs that limit occupancy to members.

In the sale and rental of housing, no one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap:

• Refuse to rent or sell housing
• Refuse to negotiate for housing
• Make housing unavailable
• Deny a dwelling
• Set different terms, conditions or privileges for sale or rental of a dwelling
• Provide different housing services or facilities
• Falsely deny that housing is available for inspection, sale, or rental
• For profit, persuade owners to sell or rent (blockbusting) or
• Deny anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing.

In mortgage lending, no one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap (disability):

• Refuse to make a mortgage loan
• Refuse to provide information regarding loans
• Impose different terms or conditions on a loan, such as different interest rates, points, or fees
• Discriminate in appraising property
• Refuse to purchase a loan or
• Set different terms or conditions for purchasing a loan.

In addition, it is illegal for anyone to:

• Threaten, coerce, intimidate or interfere with anyone exercising a fair housing right or assisting others who exercise that right
• Advertise or make any statement that indicates a limitation or preference based on race, color, national origin, religion, sex, familial status, or handicap. This prohibition against discriminatory advertising applies to single-family and owner-occupied housing that is otherwise exempt from the Fair Housing Act.

Complaints filed with HUD are investigated by the Office of Fair Housing and Equal Opportunity (FHEO). If the complaint is not successfully conciliated, FHEO determines whether reasonable cause exists to believe that a discriminatory housing practice has occurred.  Where reasonable cause is found, the parties to the complaint are notified by HUD's issuance of a Determination, as well as a Charge of Discrimination, and a hearing is scheduled before a HUD administrative law judge. Either party - complainant or respondent - may cause the HUD-scheduled administrative proceeding to be terminated by electing instead to have the matter litigated in Federal court. Whenever a party has so elected, the Department of Justice takes over HUD's role as counsel seeking resolution of the charge on behalf of aggrieved persons, and the matter proceeds as a civil action. Either form of action - the ALJ proceeding or the civil action in Federal court - is subject to review in the U.S. Court of Appeals.    For more information, please visit HUD’s website, www.hud.gov or the website mentioned in the PSA.

David Griffin has been financing homes in Macon, Warner Robins and all of Middle Georgia since 1983 and is a member of the Mortgage Bankers Association of Georgia, mbag.org.  For an archive of past articles visit mbag.org/ML_Update.html.(6/2/10)