Annual Report on Fair Housing FY 2009 - HUD

FY 2009
<strong>Annual</strong> <strong>Report</strong> on Fair Housing
Furthermore, there is concern that minorities may experience discrimination when seeking to refinance
or modify a mortgage loan or that they may be targeted by foreclosure rescue scams. One study looked at one
regional bank and found disparities between white and minority homeowners when seeking to refinance a
mortgage loan. When applying for a refinance loan, the study found that the approval rate for white applicants
was 97 percent, while the approval rate for black applicants was 50 percent. 3
HUD is taking a multi-pronged approach to addressing these problems. HUD and Fair Housing
Assistance Program (FHAP) agencies investigate and resolve complaints that they receive from persons who
believe they have experienced discrimination. In FY 2009, HUD and FHAP agencies received 10,242 complaints,
and 343 of these complaints alleged lending discrimination. In FY 2009, HUD and FHAP agencies helped settle
40 lending discrimination complaints that resulted in more than $2 million in monetary relief, as well as
changes in lending policies and practices.
Additionally, HUD understands that it must use its authority to initiate investigations in order to
effectively address this problem. Recently, the Department launched several investigations of lenders based on
the data that they have submitted pursuant to HMDA. By reviewing HMDA data, HUD can determine whether
a lender is charging different loan prices for minorities relative to whites. However, it is impossible to ascertain
from HMDA data alone whether a lender is engaging in racial discrimination. Therefore, HUD uses its authority
under the Fair Housing Act to initiate investigations and issue subpoenas to obtain additional information to
determine whether the pricing differences can be explained by factors other than race. In FY 2009, HUD filed
two lending complaints that alleged significant disparities in the pricing of loans and denial rates for white
borrowers and minority borrowers.
Additionally, in October 2009, HUD’s National Fair Housing Training Academy launched an educational
program for housing counselors and consumers on home buying, mortgage lending, and how to avoid
becoming a victim of mortgage rescue scams. The program is made up of four courses—“Buyer Beware,”
“Financial Aspects of Lending,” “Predatory Lending,” and “Preventing Foreclosure.” In order to more fully serve
attorneys, advocates, counselors, and others in the hardest-hit areas, these courses were held in eight cities
throughout the country and made available in both English and Spanish.
HUD is also using its partnerships with community organizations to address these problems. Each year,
HUD’s Fair Housing Initiatives Program (FHIP) provides grants to public, private, and nonprofit groups to
conduct fair housing enforcement, education, and outreach activities. With the help of FHIP grants, these
groups have been able to help persons who believe they have experienced discrimination. FHIP grantees
investigate complaints from these persons and are often able to remedy the situation without filing a formal
complaint or lawsuit.
FHIP grantees have also been instrumental in raising awareness about lending discrimination. After
receiving a FHIP grant, the National Fair Housing Alliance developed a national media campaign that informs
consumers on how to avoid becoming victimized by predatory lending and foreclosure prevention scams. The
campaign includes advertisements in mainstream and community television, radio, newspapers, magazines,
movie theaters, buses, and other places, in English, Spanish, and Chinese. As of the end of 2009, the campaign
received almost $8.3 million in donated media.
3 Hodge, Michael E., Mark C. Dawkins, and Jaxk H. Reeves, “A Case Study of Mortgage Refinancing Discrimination: African American Intergenerational
Wealth,” Sociological Inquiry Volume 77 Issue 1, pages 23 - 43 (January 2007).
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