Hud Reaches Settlement with Connecticut Lender Accused of Maternity Discrimination
Luxury Mortgage Corpration to pay $ 12,000 to settle Claims it denied loan to woman on maternity leave
December 22,2011
WASHINGTON – the U.S. Department of Housing and Urban Development announced in November through a press release that it has reached an agreement with Luxury Mortgage Corporation (LMC), a mortgage lender based in Stamford, Connecticut , settling accusations that the lender discriminated against a woman by denying her mortgage loan because she was on maternity leave. Under the settlement, LMC agrees to pay the woman who has denied the mortgage $12,000.
The Settlement is the the result of a complaint that was filed by a couple who claimed LMC discriminated against them when it denied the woman a mortgage loan because she was on maternity leave. The woman allege that even though hr employer provided a letter satiting that she was on paid maternity leave, LMC told her that letter was not sufficient. The Fair Housing Act prohibits housing discrimination in sales, rental, and lending based on a person’s sex, or family status.
“A woman’s access to a mortgage loan shouldn’t hinge on her maternity status,” said John Trasvina, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “Mortagage Professionals have a right to protect their interests, but lending practices that involve denying mortgages to expectant mothers, especially when they are on paid leave and plan to return to work, violate the law.”
In Addition to compensating the woman who was denied the mortgage $12,000, LMC, while admitting no violation of the law, agrees to change its lending policy to approve mortgage loans to qualified woman who are pregnant or on maternity / parental leave, including leave for adoptions.
If you feel you have been discriminated against or illegally been denied a housing dwelling, please contact your fair housing services provider and ask to speak to Fair Housing Counselor immediately.
Jose Cervantes is the Fair Housing Programs Director at CSA San Diego County and can be reached at (619) 444-5700.
HUD AND NATIONAL ASSOCIATION OF REAL ESTATE
BROKERS FORM PARTNERSHIP TO PROMOTE FAIR HOUSING
December 15, 2011
In an effort to end discriminatory treatment African Americans and other people of color often experience, HUD and the National Association of Real Estate Brokers (NAREB) today announced a new partnership to work together to promote fair housing in minority communities. In Fiscal Year 2010, 27.8% (2,820) of the 10,157 fair housing complaints HUD and its fair housing partner agencies received alleged race discrimination against blacks. At the same time, a recent HUD report showed that the nation’s “worst case housing needs” increased by 3.2 percentage points among African American families.
The Memorandum of Understanding (MOU) HUD and NAREB signed will help end discrimination by informing consumers in African American and other minority communities and public and private industry members about their fair housing rights and responsibilities under the Fair Housing Act.
“This partnership advances HUD’s and NAREB’s joint vision and commitment to end housing discrimination,” said John Trasvina, HUD Assistant Secretary for Fair Housing and Equal Opportunity (FHEO). Under the MOU, HUD and NAREB will conduct joint seminars, workshops, and forums on ways to identify unlawful sales, rental and lending and related government contracting discrimination. Additionally, they will work together to educate people in all communities about their fair housing and related government contracting rights and avenues available to them should they experience discrimination.
Furthermore, NAREB will emphasize the importance of fair housing and equal opportunity to real estate professionals as well as work with other organizations and institutions in African American communities, including faith-based groups, government agencies.
NAREB, the oldest minority real estate trade association in America, was founded to create equal housing and government contracting opportunities for every resident of the nation, regardless of race, creed, or color. Its 18,000 members, 12 regional offices, and 92 chapters work to help stabilize the nation’s housing and urban community real estate foreclosurerelated losses in minority communities.
FHEO and its partners in the Fair Housing Assistance Program investigate more than 10,000 housing discrimination complaints annually. If you feel you have been discriminated against or illegally been denied a housing dwelling, please contact your fair housing services provider and ask to speak to a Fair Housing Counselor immediately.
Jose Cervantes is the Fair Housing Programs Director at the CSA San Diego County and can be reached at (619) 444-5700
HUD Issues Discriminatory Impact Rule For Comment
NCRC and Civil Rights Groups to File Supreme Court Amicus Brief In Support of Federal Fair Housing Act Disparate Impact Standard
November 16, 2011
Dear NCRC Members,
Fair Housing is once again under attack, and this time the battle is in the United States Supreme Court. On November 7th, 2011 the United States Supreme Court agreed to hear the case of Magner v. Gallagher which raises the serious question of whether disparate impact claims are cognizable under the Fair Housing Act (“FHA”). The disparate impact theory of discrimination is an important legal argument used by NCRC and our member organizations and any attempt to prevent its use in Fair Housing cases will hamper advocates’ ability to ensure equal housing opportunity for their communities. Under this theory, a party can make a claim that a neutral policy or action is discriminatory in the absence of any intent of discrimination, as long as there is a discriminatory effect. Fair housing organizations, municipalities and other plaintiffs have historically relied upon the disparate impact theory in fair lending, exclusionary zoning and in challenging discriminatory policies and practices such as redlining and residential segregation. NCRC’s National Neighbors initiative working on behalf of our members has successfully used this legal theory in numerous civil and administrative complaints over the past decade to challenge minimum loan amounts, declining markets policies, discriminatory credit overlays, and redlining and reverse redlining issues, to mention but a few examples of the importance of this issue being heard by the Supreme Court.
The Supreme Court has never decided whether the FHA permits plaintiffs to bring claims under a disparate impact theory. In fact, the petitioner in Magner, the City of St. Paul, Minnesota, cites a case that I was personally involved with while I was executive director of Long Island Housing Services – Housing Help Inc. & Huntington Branch NAACP vs. the Town of Huntington NY – in which the court recognized it had not decided the question of whether a disparate impact analysis is appropriate in a Fair Housing Act Claim. However, to date, eleven of twelve federal courts of appeals have held that the FHA permits disparate impact claims. And today, the Department of Housing & Urban Development Office of the Assistant Secretary for Fair Housing & Equal Opportunity published a proposed rule in the Federal Register to establish uniform standards for determining when a housing practice with a discriminatory effect violates the Fair Housing Act. The proposed rule can be found at Click Here. There is a sixty day comment period for the rule ending on January 17th, 2012.
In Magner, the City of St. Paul, Minnesota has asked the Supreme Court to consider whether the FHA permits disparate impact claims. Private landlords (some have noted slumlords), seeking to limit the City’s “aggressive” enforcement of its housing code, sued the City for violating the FHA. The landlords argue that the City’s efforts to close housing that violates its housing code reduces the amount of affordable housing available to minority renters. The landlords claim that as a result, the City’s enforcement efforts have a disparate impact on minority renters in violation of the FHA. And in fact, there is evidence in the record supporting the fact that the cities agenda here is far from pro-integration. Although the District Court ruled for the City, the Eighth Circuit reversed, holding that the landlords had stated a cognizable claim under the FHA. Now, it appears that “the Supremes” are interested in this case – and it’s a double jeopardy situation or “fact pattern” for the fair housing movement.
The National Community Reinvestment Coalition is working in partnership with other civil rights organizations, legal advocates and our member organizations and will be submitting an Amicus Curiae brief in support the disparate impact theory and will be drafting a firm comment letter in support of the proposed rule. Attorneys for industry are salivating at the opportunity to undermine all of our hard work and judicial precedent to date, and we cannot allow them to succeed through either the courts or the rule making process.
In the proposed rule, HUD establishes a burden- shifting approach to determine liability for facially neutral housing practices that have a discriminatory effect. The plaintiff or complainant first must bear the burden of proving its prima facie case of either disparate impact or perpetuation of segregation, after which the burden shifts to the defendant or respondent to prove that the challenged practice has a necessary and manifest relationship to one or more of the defendant’s or respondent’s legitimate, nondiscriminatory interests. If the defendant or respondent satisfies its burden, the plaintiff or complainant may still establish liability by demonstrating that these legitimate nondiscriminatory interests could be served by a policy or decision that produces a less discriminatory effect. This standard mirrors established case law and the Interagency Policy Statement on Discrimination in Lending.
Please feel free to e-mail me or call me if you have any questions about this matter. Of course, we will keep you informed of new developments and opportunities to sign onto the Amicus. We will also share NCRC’s National Neighbors analysis of the proposed rule when complete and a model comment letter with you in the near future.
Sincerely,
David Berenbaum
