March 3, 2021

Vimeo Channel YouTube Channel

HUD Announces Historic “Redlining” Settlement

002Redlining, the act of discriminating against a group of people in the mortgage loan servicing process, is prohibited by the Fair Housing Act. Redlining often goes undetected as long as those being discriminated against don’t file a complaint with the government. When such complaints are reported to the FHA and HUD, they are taken seriously and investigated to insure violations of the Fair Housing Act don’t continue.

This week HUD announced a historic settlement in a redlining case in HUDNo.15-064. “The U.S. Department of Housing and Urban Development (HUD) today announced an agreement with Associated Bank, N.A. (Associated) to resolve a disparate treatment redlining case, one of the largest redlining complaints brought by the federal government against a mortgage lender. At approximately $200 million, it is the largest settlement of this kind HUD has ever reached.”

The settlement comes at the end of a HUD investigation to a Fair Housing act complaint, “alleging that from 2008-2010, the Wisconsin-based bank engaged in discriminatory lending practices regarding the denial of mortgage loans to African-American and Hispanic applicants and the provision of loan services in neighborhoods with significant African-American or Hispanic populations” according to the HUD press release.

“This settlement sends a strong message that HUD does not tolerate practices that unfairly restrict an equal and open housing market,” said HUD Secretary Julin Castro, as quoted in the press release. “Discriminatory lending practices have too often cut off too many credit-worthy families from the opportunities they need to thrive. This agreement will ensure that more Americans can fulfill their hopes and aspirations.”

In the coming 36 months, Associated has agreed to pay nearly $10 million, “in the form of lower interest rate home mortgages and down payment/closing cost assistance to qualified borrowers in majority-minority census tracts in the housing market areas of Chicago; Milwaukee; Minneapolis-St. Paul; Racine, Wisconsin; Kenosha, Wisconsin; and Lake County, Illinois.” As you can see, the payout covers a great deal of territory. According to HUDNo.15-064:

“HUD’s analysis of Associated Bank’s mortgage lending activity indicated that, compared to other mortgage lenders, Associated made few loans in majority-minority census tracts in five metropolitan areas in Illinois, Wisconsin, and Minnesota, but did make loans in nearby predominantly white tracts.”

The Fair Housing Act prohibits such discrimination. Borrowers who feel they have experienced such discriminatory practices should file a complaint with the HUD Office of Fair Housing and Equal Opportunity at (800) 669-9777(voice) or (800) 927-9275(TTY).

The FHA/HUD official site adds, “Housing discrimination complaints may also be filed at www.hud.gov/fairhousing or by downloadingHUD’s free housing discrimination mobile application, whichcan be accessed through Apple devices, such as the iPhone, iPad, and iPod Touch.”

Do you have questions about FHA home loans? Ask us in our comments section. All comments are held for moderation before they appear on the website.

Joe Wallace - Staff Writer

By Joe Wallace

May 28, 2015

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.

Connect with Joe:

 

Browse by Date:

About FHANewsBlog.com
FHANewsBlog.com was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

5850 San Felipe Suite #500, Houston, TX 77057 281-398-6111.
FHANewsBlog.com is privately funded and is not a government agency.

Share This