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HUD Launches Website to Combat Source of Income Discrimination for Families Using Housing Vouchers

HUD’s new website details protections against Source of Income (SOI) discrimination for families with Housing Choice Vouchers (HCVs). SOI discrimination is the practice where landlords, owners, and real estate brokers refuse to rent to current or prospective qualified tenants with an HCV or other forms of public assistance. The Source of Income Protections website serves as a “one-stop shop” for HUD stakeholders that summarizes existing materials to explain what SOI discrimination looks like, identifies states and local jurisdictions that prohibit it, and provides resources for people who believe they have experienced this form of discrimination.

“Denying housing to Veterans, families with young children, or people trying to get off the street just because they get help to pay their rent preserves the legacy of discrimination, especially during this affordable housing crisis,” said Secretary Marcia L. Fudge. “Source of Income protections are important for families to thrive regardless of their economic status.”

HUD launches this resource in alignment with the principles laid out in the Biden-Harris Administration’s Blueprint for a Renter’s Bill of Rights, and at a time where lower income families face tremendous challenges finding safe, quality, and affordable housing. Leveraging all its resources, HUD is dedicated to ensuring that families with Housing Choice Vouchers (HCVs) have access to the housing and neighborhoods of their choice.

“There is no reason that those with vouchers should face discriminatory barriers that hinder or halt their housing search. This experience is still all too common for renters, despite having Source of Income protections in many states and jurisdictions. In order to address this issue, it is important to work with stakeholders to eliminate those practices," said Principal Deputy Assistant Secretary for Public and Indian Housing, Richard J. Monocchio. "HUD’s new webpage provides useful information to everyone -- tenants, landlords, housing authorities, and others -- with the ultimate goal of improving tenants' leasing success.”

SOI discrimination can, and often does, include other policies or practices that impact a potential renter’s ability to attain housing using vouchers. In states and jurisdictions covered by existing SOI protections, refusal to accept vouchers and other public assistance to pay rent, or adding additional requirements, can constitute as a form of housing discrimination. Thus, enforcing these protections is a critical component to ensuring people have fair access to the rental market.

“There is growing evidence that state and local laws prohibiting Source of Income discrimination improve voucher utilization rates for public housing authorities and expand housing and neighborhood choices for voucher holders,” said Solomon Greene, Principal Deputy Assistant Secretary for HUD’s Office of Policy Development and Research. “As part of our role at HUD, we believe it is imperative to support evidence-based policies that advance HUD’s mission to create strong, sustainable, inclusive communities and quality affordable homes for all.”

Local and state organizations may enforce illegal SOI discrimination and conduct fair housing testing to root it out. “Fair housing testing is an indispensable investigative tool to root out housing discrimination and FHEO encourages testing activities designed to identify discrimination that violates the Fair Housing Act,” said Demeteria McCain, Principal Deputy Assistant Secretary for the Office of Fair Housing and Equal Opportunity. “As I made clear in my February 2024 memo, Fair Housing Assistance Program (FHAP) recipients may use HUD funds to design source of income discrimination testing projects to detect discrimination that may violate the Fair Housing Act or state or local laws.”ent, all remaining residents who still need to be moved into supported housing will be.

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Read the March 13, 2024 HUD press release.

HUD Charges Montana Property Manager and Apartment Complex Owner with Retaliation

The U.S. Department of Housing and Urban Development (HUD) announced it is charging an individual property manager and ownership entity in Livingston, Montana, for retaliation against a tenant for their exercise of fair housing rights, retaliatory behavior including coercion, intimidation, threats, or interference in violation of Section 818 of the Fair Housing Act. Read HUD’s Charge. The Fair Housing Act prohibits retaliation for exercising fair housing rights, as well as coercing, intimidating, threatening, or interfering with someone’s exercise of those rights. HUD’s Charge alleges that the property manager and owner of a Livingston, Montana, ten-unit apartment complex retaliated against a tenant after the tenant informed the property manager that his unwanted conduct toward her daughter was inappropriate given the property manager’s position as landlord. After the tenant confronted the property manager, the property manager took several retaliatory actions, including sending multiple threats of eviction, revoking tenancy privileges, and sending harassing text messages, ending in seeking to evict the complainant. The tenant felt forced to leave the unit and seek out alternative, less desirable housing because of the retaliation. A U. S. Administrative Law Judge will hear HUD’s charge unless any party elects to have the case heard in Federal district court. If the Administrative Law Judge finds, after a hearing, that discrimination has occurred, the judge may award damages to the resident for his losses as a result of the discrimination; injunctive relief and other equitable relief to deter further discrimination and payment of attorney fees; and civil penalties to vindicate the public interest. If the Federal court hears the case, the Judge may also award punitive damages to the resident. People who believe they are the victims of housing discrimination should contact HUD at (800) 669-9777 (voice) or (800) 927-9275 (TTY). More information is available at www.hud.gov/fairhousing and www.justice.gov.

You can follow Secretary Fudge on Twitter, Facebook and Instagram. ***** Read the January 23, 2024 HUD release.

CFPB and Justice Department Sue Developer and Lender for Bait-and-Switch Land Sales and Predatory Financing

The Consumer Financial Protection Bureau (CFPB) and the U.S. Department of Justice have sued Colony Ridge, a Texas-based developer and lender, for operating an illegal land sales scheme and targeting thousands of Hispanic borrowers with false statements and predatory loans. Colony Ridge allegedly sells unsuspecting families flood-prone land without water, sewer, or electrical infrastructure, and that the company sets borrowers up to fail with loans they cannot afford. Roughly 1-in-4 Colony Ridge loans ends in foreclosure, after which the company repurchases the properties and sells them to new borrowers. The CFPB and Justice Department are seeking redress for borrowers harmed by Colony Ridge and an immediate end to its illegal practices. This is the CFPB’s first federal court lawsuit charging a defendant with violations of the Interstate Land Sales Full Disclosure Act.

The lawsuit names as defendants three Texas-based Colony Ridge affiliate companies, as well as Loan Originator Services, a nonbank mortgage company licensed to originate loans in Texas. Colony Ridge has developed more than 40,000 lots spread across an unincorporated area of Liberty County, Texas, approximately 30 miles northeast of Houston. Colony Ridge markets these subdivisions using the names “Terrenos Houston” and “Terrenos Santa Fe.”

Colony Ridge targets Spanish-speaking borrowers: it advertises almost exclusively in Spanish, often in social media posts featuring, for example, national flags and regional music from Latin America. In these advertisements, Colony Ridge promises consumers the dream of home ownership with its own seller financing: an easy-to-obtain loan product that requires no credit check and only a small deposit. The complaint alleges that Colony Ridge has lured thousands of Hispanic consumers into their predatory loan products. Foreclosure and property deed records from September 2019 through September 2022 show that Colony Ridge initiated foreclosures on at least 30% of seller-financed lots within just three years of the purchase date, with most loan failures occurring even sooner. Records also confirm that Colony Ridge accounted for more than 92% of all foreclosures recorded in Liberty County between 2017 and 2022.

Specifically, the complaint filed today alleges that Colony Ridge:

• Misleads borrowers about infrastructure on the lots it sells: Colony Ridge has falsely represented that lots in the Terrenos Houston subdivisions were sold with water, sewer, and electrical infrastructure already in place. The complaint cites numerous advertisements, including TikTok videos where the company makes claims like “Terrenos Houston tiene todos los servicios de ciudad por cada terreno” (“Terrenos Houston has all city services for each lot.”). After applicants pay a non-refundable deposit, Colony Ridge discloses the properties may not provide those services and says it only in English.
• Sells lots that flood with rain and raw sewage: The complaint alleges that Colony Ridge employees fail to inform borrowers of flood risk when lots have repeatedly flooded in the past, or falsely tells them the lots have not flooded. In fact, in parts of the Terrenos Houston subdivision, rain causes significant flooding, causing raw sewage to run through or around borrowers’ property, and damaging their personal belongings.
• Churns through borrowers in a cycle of foreclosure: When families fall behind on payments and enter foreclosure, it allows Colony Ridge to “flip” the properties by repurchasing and reselling them, often at higher prices. Foreclosure and property deed records show that Colony Ridge flipped at least 40% of all the properties it sold between September 2019 and September 2022, selling approximately 8,237 properties twice, 3,267 properties three times, and 2,067 properties four or more times in three years.
• Targets Hispanic consumers with predatory loans: Through direct-to-consumer marketing on websites, social media engagement, and telemarketing, Colony Ridge targets Hispanic consumers. Colony Ridge then exploits language barriers during its sales process and uses high-pressure sales tactics to push borrowers to obtain their loan products quickly. The loans have exorbitant interest rates. Between 2017 and 2021, interest rates on Colony Ridge’s loans ranged from between 10.9% to 12.9%, while a standard 20-year fixed rate loan averaged 2.35% to 4.05% during the same timeframe. And in extending the loan, Colony Ridge and Loan Originator Services did not collect information needed to determine if applicants can afford the loan.
• Exploits language barriers at borrowers’ expense: While Colony Ridge conducts most of its marketing activities in Spanish, when it comes to the actual transaction, it offers important documents only in English. Failing to offer borrowers accurate translations of contracts, deeds, and other documents in the language in which it conducts the sales and exploiting borrowers’ limited English proficiency violates federal law.

The CFPB alleges that defendants unlawfully discriminated against applicants on the basis of their race or national origin in violation of the Equal Credit Opportunity Act and its implementing regulation. The CFPB separately alleges that Colony Ridge engaged in unlawful deception and violated the Interstate Land Sales Full Disclosure Act and its implementing regulations. The Justice Department joined the CFPB’s claim of a violation of the Equal Credit Opportunity Act and its implementing regulation, and separately alleges that Colony Ridge violated the Fair Housing Act. The complaint seeks to stop Colony Ridge’s alleged unlawful conduct, provide redress for affected consumers, and impose a civil penalty payable to the CFPB victims relief fund. If the defendants are found liable, the amount of any restitution will be determined in the litigation in federal court.

Read today’s complaint.

The CFPB’s website has resources about credit discrimination and mortgages. Consumers can submit complaints about financial products or services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

Employees of companies who believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to whistleblower@cfpb.gov.

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Read the December 20, 2023 CFPB article.

Read the December 20, 2023 Justice Department release.

Hate Bias Reporting Forum on January 31st

 

Having trouble viewing this email? View it as a Web page. Join us at our LIVE forum that brings together law enforcement and the community to improve hate bias reporting. To register, click on the picture above or click HERE. Victim of Discrimination? Training & Partnerships HOME      ABOUT MCCR      SERVICES      PUBLICATIONS      EVENTS      PRESS      CONTACT US

 

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Source: Maryland Commission on Civil Rights email, December 20, 2023.

The largest credit union rejected over 50% of its Black home mortgage applicants

A CNN analysis has found that Navy Federal Credit Union (Navy Federal) - the largest credit union - has the widest disparity in mortgage approval rates between White and Black borrowers of any major lender. In 2022, the disparity increased.

Navy Federal was founded in 1933 to serve Navy employees, but is now open to all members of the armed forces, Department of Defense personnel, veterans, and their relatives. With a membership around 13 million, it has over $165 billion in assets. Navy Federal lends to military servicemembers and veterans. 

Navy Federal approved more than 75% of the White borrowers who applied for a new conventional home purchase mortgage in 2022, according to the most recent data available from the Consumer Financial Protection Bureau. Less than 50% of Black borrowers who applied for the same type of loan were approved. In 2022, the credit union rejected about 3,700 Black applicants for home purchase mortgages. Navy Federal also approved Latino borrowers at significantly lower rates than White borrowers.

While many banks - in Baltimore and elsewhere - also approved White applicants at higher rates than Blacks, the almost 29% gap in Navy Federal’s approval rates was the widest of any of the 50 U.S. lenders that originated the most mortgage loans in 2022. The disparity was the same for White and Black applicants who had similar incomes and debt-to-income ratios. Navy Federal approved a slightly higher percentage of applications from White borrowers making below $62,000 a year than it did of Black borrowers making $140,000 or more.

CNN's statistical analysis also found that Black applicants to Navy Federal were over twice as likely to be denied as White applicants even when over 12 different variables – such as income, debt-to-income ratio, property value, downpayment percentage, and neighborhood characteristics – were the same.

Mortgage lending experts and fair housing advocates commented that the racial gaps in Navy Federal’s approval rates were very large and raised questions about the institution’s lending practices. Lisa Rice, the president and CEO of the advocate National Fair Housing Alliance said the racial gaps in Navy Federal’s lending identified by CNN were “some of the largest I’ve seen.”

It is important to note that CNN’s analysis doesn’t prove that Navy Federal discriminated against any borrowers. However, it does show significant disparities in the credit union’s approval rates for borrowers of different races – and that it has larger racial gaps than many other large financial institutions. The analysis was based on data collected under the Home Mortgage Disclosure Act.

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Read the December 14, 2023 CNN article.

Register for NCRC's 2024 Just Economy Conference

 

Are you passionate about building a more just and equitable future? If so, would you be interested in becoming an NCRC member and enjoying discounted tickets for the 2024 Just Economy Conference?    The 2024 Just Economy Conference is the leading national conference for economic and social justice. Don’t miss your chance to join activists, elected officials, policymakers, community leaders, civil rights groups, faith-based organizations and economic and social justice advocates from across the nation. This is your chance to connect with a vibrant community of individuals dedicated to making a difference.   Join NCRC today and gain access to exclusive member benefits, including discounted tickets for the conference. NCRC members will also have the opportunity to participate in our Hill Day on April 2.    Treat yourself to a holiday gift of a Just Economy Conference ticket today!    We can’t wait to see you there, Team NCRC P.S. If your organization doesn’t qualify for NCRC membership, you can join our Just Economy Club, and still enjoy some of the perks of membership, like discounted tickets to the Just Economy Conference!

***** Source: National Community Reinvestment Coalition (NCRC) email, December 14, 2023.

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