Tag Archives: discrimination

Effective Immediately: Discriminatory Speech and Conduct Outside of REALTORS® Practice is Prohibited

The NATIONAL ASSOCIATION OF REALTORS® Board of Directors approved a change today expanding the Code of Ethics’ applicability to discriminatory speech and conduct outside of members’ real estate practices.

OnlineEd Blog

(November 13, 2020)

 

Salem, Oregon November 13, 2020 – NAR’s Board of Directors today strengthened REALTORS®’ commitment to upholding fair housing ideals, approving a series of recommendations from NAR’s Professional Standards Committee that extend the application of Article 10 of the Code of Ethics to discriminatory speech and conduct outside of members’ real estate practices.

Article 10 prohibits REALTORS® from discriminating on the basis of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity in the provision of professional services and in employment practices. The Board approved a new Standard of Practice under the Article, 10-5, that states, “REALTORS® must not use harassing speech, hate speech, epithets, or slurs” against members of those protected classes.

The Board also approved a change to professional standards policy, expanding the Code of Ethics’ applicability to all of a REALTOR®’s activities, and added guidance to the Code of Ethics and Arbitration Manual to help professional standards hearing panels apply the new standard.

Finally, Directors approved a revision to the NAR Bylaws, expanding the definition of “public trust” to include all discrimination against the protected classes under Article 10 along with all fraud. Associations are required to share with the state real estate licensing authority final ethics decisions holding REALTORS® in violation of the Code of Ethics in instances involving real estate-related activities and transactions where there is reason to believe the public trust may have been violated.

The Board made these changes effective immediately, though the changes cannot be applied to speech or conduct that occurred before the effective date. NAR has produced training and resource materials to assist leaders with understanding and implementing the changes and will be rolling those out in the coming weeks.

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Owners and Property Managers Agree with HUD to Pay $630,000 for Discrimination Suit

HUD Announces agreement to resolve allegations that property owners used rental screening policies that prevented applicants with mental disabilities from renting

By Jeff Sorg, OnlineEd Blog

(May 16, 2016) – The U.S. Department of Housing and Urban Development (HUD) announced today that it has reached a $630,000 agreement with a group of Illinois property owners and a management company resolving allegations they violated the Fair Housing Act and Section 504 of the Rehabilitation Act of 1973 by using rental screening policies that prevented applicants with mental disabilities from living in a supportive living complex the group owned. Read the agreement.

The Fair Housing Act prohibits discrimination in the sale or rental of a dwelling on the basis of disability. In addition, Section 504 of the Rehabilitation Act of 1973 prohibits discrimination on the basis of disability by any program or activity receiving federal financial assistance.

“Discriminatory practices that target persons with disabilities not only violate their rights, they lock them out of decent, safe and affordable housing,” said Gustavo Velasquez, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “HUD remains committed to taking action when property owners and managers fail to meet their obligations under the Fair Housing Act.”

The case came to HUD’s attention after several individuals with mental disabilities filed complaints alleging they were denied residency at the property managed by Eden Management, LLC, due to their disabilities. The individuals filed their complaints with the assistance of HOPE Fair Housing Center, a HUD Fair Housing Initiatives Program agency in DuPage County. HOPE conducted three tests at Eden and also filed a complaint with the Department.

Under the terms of the Conciliation and Voluntary Compliance Agreement, Eden will pay Complainants $630,000, which includes relief and attorneys’ fees and costs. The agreement further requires Eden to make significant policy changes, including revising its admissions manual and handbook; updating its non-discrimination statement; establishing a reasonable accommodation policy; and conducting fair housing training for employees. Furthermore, the company will develop a protocol to apply objective admissions criteria, notify all applicants of their due process rights, and refrain from asking applicants about the existence of mental disabilities or prescriptions during tours of the facility. Eden will also provide a letter to their top three referral sources encouraging individuals to apply regardless of mental disability.

In FY 2015, disability was the most common basis of complaints filed with HUD and its partner agencies, being cited as a basis for 4,548 complaints, or nearly 55 percent of the overall total.

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers, visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

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Justice Department Reaches Settlement with Sage Bank Over Allegations of Mortgage Discrimination

Complaint alleges bank charged African-American and Hispanic borrowers higher prices for home loans than charged to similarly situated White borrowers.

By Jeff Sorg, OnlineEd Blog

unfair with hand(December 2, 2015) – The Justice Department filed a complaint and proposed consent order on November 30th to resolve allegations that Sage Bank, headquartered in Lowell, Massachusetts, violated the Fair Housing Act and the Equal Credit Opportunity Act (ECOA) by engaging in a pattern or practice of discrimination on the basis of race and national origin in the pricing of its residential mortgage loans.

The United States’ complaint alleges that Sage Bank charged African-American and Hispanic borrowers higher prices for home loans than Sage Bank charged to similarly situated White borrowers for reasons unrelated to their creditworthiness. Specifically, under Sage Bank’s pricing policy, each of its loan officers was assigned a “target price,” which was the price a loan officer was required to achieve on each home loan, regardless of a borrower’s creditworthiness. The complaint alleges that those loan officers whom Sage Bank assigned higher target prices disproportionately served African-American and Hispanic borrowers. The complaint also alleges that loan officers had discretion to price loans above their target prices and did so to a greater extent for African-American and Hispanic borrowers than for White borrowers. The result, the complaint alleges, was that the average African-American borrower paid approximately $2,500 more for his/her loan than did a similarly qualified White borrower; the average Hispanic borrower paid approximately $1,400 more.

The consent order, which is subject to court approval, was filed in conjunction with the Justice Department’s complaint in the U.S. District Court for the District of Massachusetts. Under the consent order, Sage Bank will pay $1,175,000 into a settlement fund to compensate borrowers and applicants who were harmed by Sage Bank’s policies. The consent order also requires Sage Bank to establish a new loan pricing policy and a new loan officer compensation policy, have loan officers and bank employees undergo fair housing and fair lending training, and establish a monitoring program to detect future unlawful disparities in mortgage loan pricing.

“Sage Bank’s loan pricing policies created the risk that borrowers would be treated differently based on impermissible characteristics like race and national origin, and that was in fact the result,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “This settlement ensures that all potential borrowers will be treated equally, regardless of race and national origin, and Sage Bank has agreed to restructure and monitor its lending practices to ensure that it is meeting those obligations.”

“Sage Bank’s discriminatory practices were aimed at some of our most vulnerable neighborhoods and populations,” said U.S. Attorney Carmen M. Ortiz of the District of Massachusetts. “Homeownership is the foundation of the American dream, and we will continue our work to ensure that all people – regardless of their skin color or the language they speak – have equal access to that dream.”

The lawsuit originated from a referral by the Federal Deposit Insurance Corporation.

The Justice Department’s enforcement of fair lending laws and the Servicemembers Civil Relief Act is conducted by the Housing and Civil Enforcement Section in the Civil Rights Division. Since 2010, the Civil Rights Division has provided approximately $1.3 billion in monetary relief for individual borrowers and impacted communities through its enforcement of the Fair Housing Act, ECOA and the SCRA. The Attorney General’s annual reports to Congress on ECOA enforcement highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications/.

Additional information about fair lending enforcement by the Justice Department can be obtained from the Justice Department’s website at http://www.justice.gov/fairhousing.

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers, visit www.OnlineEd.com.

 All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained by third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

Disparate Impact Ruling and Fair Housing

What is disparate impact?

Supreme_Court_US_2010

 

(Jeff Sorg, OnlineEd) –  The Supreme Court’s recent decision on disparate impact basically means that even if the same policies are applied to all individuals  as neutral and nondiscriminatory  but are found to have the effect of discrimination then they are in violation of the Fair Housing Act. A neutral policy would be one that appears not to be discriminatory, but actually ends up being discriminatory in application or has the effect of discrimination against individuals protected under fair housing.

Disparate Impact is a legal doctrine under the Fair Housing Act which states that a policy may be considered discriminatory if it has a disproportionate “adverse impact” against any group based on race, national origin, color, religion, sex, familial status, or disability when there is no legitimate, non-discriminatory business need for the policy. In a disparate impact case, a person can challenge practices that have a “disproportionately adverse effect” on those protected by the Fair Housing Act and are “otherwise unjustified by a legitimate rationale.” (National Fair Housing Alliance)

Disparate impact lawsuits will usually rely on statistical analysis to show that a neutral policy has a disproportionate effect on a protected group.   In other words, the practice is at fault based on its effects. An example would be a mortgage company that allows brokers and loan officers considerable leeway in determining a customer’s interest rate, thereby resulting in higher prices for Hispanics, whether or not this was the intended outcome of the practice.

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers, visit www.OnlineEd.com.

  This article was published on June 30, 2015. All information contained in this posting is deemed correct and current as of this date, but is not guaranteed by the author and may have been obtained by third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

CFPB Files Against Provident Funding Associates for Discriminatory Mortgage Pricing

discrimination definition(Jeff Sorg, OnlineEd) WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) filed a joint complaint against Provident Funding Associates for charging higher broker fees on mortgage loans to African-American and Hispanic borrowers. The agencies also filed a proposed order that, if entered by the court, would require Provident to pay $9 million in damages to harmed African-American and Hispanic borrowers.

“Consumers should never be charged higher fees because of their race or national origin,” said CFPB Director Richard Cordray. “We will continue to root out illegal and discriminatory lending practices in the marketplace. I look forward to working closely with our partners at the Department of Justice to ensure consumers are treated fairly.”

“The Civil Rights Division is committed to ensuring that all types of lending institutions, including wholesale mortgage lenders, comply with the fair lending laws,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Justice Department’s Civil Rights Division. “We look forward to further collaboration with the Bureau in protecting consumers from illegal and discriminatory lending practices.”

“The settlement demonstrates this U.S. Attorney’s office will devote the resources necessary to root out and address unfair lending practices that affect citizens of this district,” said U.S. Attorney Melinda Haag. “The law is clear: access to mortgage loans may not be made more difficult because of an applicant’s race or national origin. We are glad that Provident has agreed to put an end to this practice without engaging in protracted litigation.”

Provident is headquartered in California and originates mortgage loans through its nationwide network of brokers. Between 2006 and 2011, Provident made over 450,000 mortgage loans through its brokers. During this time period, Provident’s practice was to set a risk-based interest rate and then allow brokers to charge a higher rate to consumers. Provident would then pay the brokers some of the increased interest revenue from the higher rates – these payments are also known as yield-spread-premiums. Provident’s mortgage brokers also had discretion to charge borrowers higher fees, unrelated to an applicant’s creditworthiness or the terms of the loan. The fees paid to Provident’s brokers were thus made up of these two components: payments by Provident from increased interest revenue and through the direct fees paid by the borrower.

The Equal Credit Opportunity Act prohibits creditors from discriminating against applicants in credit transactions on the basis of characteristics such as race and national origin. In the complaint, the CFPB and DOJ allege that Provident violated the Equal Credit Opportunity Act by charging African-American and Hispanic borrowers more in total broker fees than white borrowers based on their race and national origin and not based on their credit risk. The DOJ also alleges that Provident violated the Fair Housing Act, which also prohibits discrimination in residential mortgage lending.

The agencies allege that Provident’s discretionary broker compensation policies caused the differences in total broker fees, and that Provident unlawfully discriminated against African-American and Hispanic borrowers in mortgage pricing. Approximately 14,000 African-American and Hispanic borrowers paid higher total broker fees because of this discrimination.

On December 6, 2012, the CFPB and the DOJ signed an agreement that has facilitated strong coordination between the two agencies on fair lending enforcement, including the pursuit of joint investigations such as this one.

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers, visit www.OnlineEd.com.

This article was published on May 29, 2015. All information contained in this posting is deemed correct and current as of this date, but is not guaranteed by the author and may have been obtained by third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.