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Fair Housing

Lender to pay $35k for discriminating against mother on maternity leave

Discrimination is a serious offense in the eyes of the Fair Housing laws, whether on purpose or not.

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The U.S. Department of Housing and Urban Development (HUD) announced that Jackson, TN-based mortgage lender FirstBank Mortgage Partners will pay $35,000 to settle allegations that it violated the Fair Housing Act when it denied a mortgage loan to a couple because one applicant was on maternity leave.

The Fair Housing Act makes it unlawful to discriminate in the terms, conditions, or privileges associated with the sale or rental of a dwelling on the basis of sex or familial status, including denying a mortgage loan or mortgage insurance because an applicant is pregnant or on maternity leave.

The Conciliation Agreement resolves a complaint filed with HUD by a married couple who alleged that after FirstBank had approved their application and scheduled its closing, FirstBank learned that the wife was on maternity leave and notified the couple within 24 hours of the scheduled closing that the loan was denied. The couple alleged that they then lost the opportunity to buy a home in Virginia. The couple allegedly also lost their current housing, requiring the wife and infant twins to move in with her parents while the husband moved to an apartment with their three-year old. According to the complaint, FirstBank did not consider the couple’s ability to make loan payments during the wife’s maternity leave, ignoring the husband’s salary and the wife’s short-term disability insurance payments.

“No qualified applicant should be denied a mortgage loan solely because they take maternity, paternity or parental leave,” said Gustavo Velasquez, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity. “HUD will continue to enforce the nation’s fair housing laws to ensure no one is illegally denied the opportunity to own a home.”

Under the terms of the agreement, FirstBank Mortgage Partners will pay $35,000 to the couple that filed the complaint. The company will also adopt a national paternal leave policy and receive annual fair housing and fair lending training.

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Fair Housing

What the new criminal background checks mean for real estate

The Fair Housing Act provides guidance regarding homebuyer and renter background checks.

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If you consider that that nearly a third of Americans, 100 million people in all, have a criminal record (with an additional 650,000 released from prison each year) it kind of justifies some seeking to run a criminal background check on a potential client for sales or rental purposes.

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At the recent [REALTORS] Legislative Meetings & Trade Expo in Washington, D.C., a forum titled, “Criminal Background Checks, Fair Housing Compliance and You” posited that, “The three things [realtors] need to do when developing a program are have consistent procedures, uniform standards, and an explanation for criminal background check programs.”

Just who is protecting whom?

The Department of Housing and Urban Development (HUD) published the Fair Housing Act guidance on April 4 that has raised concerns for housing providers who use criminal history screening processes to make decisions about sales, rentals financing and other real estate activity.

Consider this: minorities are a protected class under the Fair Housing Act. Persons with criminal records are not. So are those individuals being biased? The interpretation of HUD’s guidance is that creating arbitrary or blanket criminal-based policies and restrictions could potentially violate the Fair Housing Act.

Do’s and Don’ts

For its part, the National Association of Realtors (NAR) has summarized HUD’s guidance in a “Do’s and Don’ts” guide, with tips that urge real estate professionals to uniformly consider criminal history, regardless of an individual’s protected class status, while avoiding policies that exclude anyone based on arrest records alone. Selected examples can be seen below:

Do’s Don’ts
Create tailored criminal history-based policies/practices. Don’t create arbitrary or overly-broad criminal history-based policies/practices.
Be sure to have clear, specific reasoning for the criminal history-based policy/practice that can be supported by evidence. Don’t maintain a policy/practice, or any portion thereof, that does not serve a substantial, legitimate, nondiscriminatory interest.
Exclude individuals only based on criminal convictions that present a demonstrable risk to resident safety or property. Don’t create exclusions based on arrest records alone.
Consider the nature and severity of an individual’s conviction before excluding the individual based on the conviction. Don’t create a blanket exclusion of any person with any conviction record.

Granted, everyone has a right to live wherever they can afford, and that means strong support for the Fair Housing Act and its mission. The better understanding that realtors have of the rules and regulations affecting their businesses allow them to further strengthen the communities they serve, while ensuring equal housing opportunities for the people who live there.

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Fair Housing

Some landlords refuse to rent to Trump supporters, others to Mexicans, others to single moms – which of these is legal?

Landlords violate Fair Housing laws from time to time, sometimes knowingly, other times unaware of their illegal acts. But sometimes discrimination is totally legal. Let’s discuss.

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Just recently, a Colorado landlord posted a notice that he would refuse to rent to someone who supported Donald Trump. Strangely, this practice is legal. The Fair Housing Act does not have provisions for political views. However, according to the Fair Housing Act of 1968, landlords cannot 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

Protecting consumers in California

The agency responsible for violations is HUD. Tenants can file complaints with HUD, but many times, minorities and immigrants aren’t even aware that discrimination has occurred. This is the situation in Santa Clara, California. An apartment complex allegedly refused to accept Mexican forms of identification, such as a passport, while they encouraged an individual with a Canadian passport to apply for a rental. Mexican families had no way of knowing that they were being discriminated against.

Project Sentinel, which is a fair housing non-profit organization discovered the discrepancy and reported it to HUD. After six months of investigations and negotiations, a settlement was reached. The apartment complex, DBA Income Property Specialists, and the owners and managers came to an agreement whereby they would give Project Sentinel a monetary settlement and go through training to ensure they would not be discriminating in the future. It was a rather costly error in judgment for Income Property Specialists.

A Texas agency dealing with Fair Housing

In Texas, the Texas Workforce Commission is the state agency responsible for monitoring rental properties.

TWC offers training for management companies and developers who are required to have the Texas Department of Housing and Community Affairs fair housing training. In addition, there are many resources available through the website to ensure your rentals are operating under the Fair Housing Act.

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Fair Housing

Landlords charged with discrimination for allowing harassment of tenants with disabilities

Fair Housing protects against discrimination, so when a landlord asks someone to move out because other residents are harassing them for being disabled, HUD takes action.

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As real estate agents and brokers, you are hopefully well versed in the Fair Housing Act, which protects tenants and homeowners from discrimination.

A recent case of housing discrimination in Wisconsin serves as a poignant reminder that landlords and housing managers are not only responsible for providing housing fairly, but also for protecting tenants against hate and harassment based on factors such as race, religion, gender, or, in this case, disability.

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The U.S. Department of Housing and Urban Development are charging the owners and managers of a Cross Plains, Wisconsin apartment building with violations of the Fair Housing Act.

According to the suit, William Ranguette and Candice Wood, owners and managers of the Applewood senior housing complex, failed to address the harassment of their tenants, a mother and daughter who were being harassed on the basis of their disabilities.

Tenants were taunted for being disabled

The mother, who has cerebral palsy, and her daughter, who has Down’s Syndrome, reported that other tenants would follow them home and insult them, saying things like “you don’t belong here, you belong in an institution,” and hurling other abuses.

The mother reported these incidents to the local police, who issued warnings – but the harassment continued.

When the tenant reported these incidents to the apartment managers, she was told that she was causing too much trouble and was pressured to move. The tenants received a notice that their lease would not be renewed, and they moved out.

Renters should never feel degraded

According to Housing and Urban Development assistant secretary Gustav Velasquez, “A person’s home should be where they feel the greatest level of comfort – not anguish and fear because of being subjected to humiliating and degrading comments.”

“Harassing a person because of their disability is not only disturbing, it is illegal,” Velasquez concludes.

It is likewise both heartless and illegal for a housing manager to refuse to intervene to prevent harassment.

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