2006 NS Contract - Contract Conducting Analysis of Impediments Fair Housing Choice Donald B Eager & Assoc

Browse Search

S3 City of Cuyahoga Falls, Ohio 32 la �, Anal sis of Im ediments to Fair Housin Choice ownership. These discriminatory policies are holdovers from a past that would not allow loans to people who would represent an "inharmonious racial group" to neighborhoods. The policies of local lenders, real estate agents and even the federal government (through the Federal Housing Administration and Veterans Administration loan policies) assured that our country would grow with segregated cities. The most basic right of all Americans, to live where they want and can afford, was denied throughout the housing market. Evidence that mortgage lenders continue to use these protected classes to deny housing is revealed. Research of the mortgage lending industry reveals that lending discrimination and "redlining" continue to be a serious and persistent obstacle to home ownership. Since passage of the Home Mortgage Disclosure Act (HMDA) over twenty years ago, analyses of HMDA data by community -based organizations, academic organizations, and certain national origins face unequal access to housing credit. Current studies consistently show that the income, racial, and ethnic characteristics of a neighborhood or individual plays a significant role in who receives loans and who does not. Under the Fair Housing Act, it is unlawful for any person who engages in the business of making or purchasing residential real estate loans, or in the selling, brokering, or appraising of residential real property, to discriminate on the basis of the factors listed above. The Act contains both public and private enforcement mechanisms and violations may be established by proof of disparate treatment or disparate impact. Disparate treatment occurs when a lender treats a credit applicant or borrower differently based on one of the prohibited characteristics during the lending process. For example, requiring one applicant to make an appointment to discuss a loan application while allowing another applicant to "drop in anytime" would be considered disparate treatment. Steering some applicants into higher priced loan products is another example of disparate treatment, as is selectively using income averaging to improve debt -to- income ratios only for some applicants. Finally, requiring a change in loan terms if the marital status of the borrower changes during the life of the loan, when there is no evidence of unwillingness or inability to pay, would also be disparate treatment. Disparate impact occurs when a lender applies a policy or practice equally to all credit applicants, but the policy or practice has a disproportionately adverse impact on applicants from a protected group. For example, an institution has established a lending policy that prohibits mortgage loans below a certain dollar threshold. While this policy may have been in effect for some time and maybe applied equally to all applicants, such a dollar limitation may result in discrimination against a protected group. A group that may be more likely to purchase homes priced below this threshold would be prevented from obtaining home mortgage loans. Another example of disparate impact is the practice of using gross income in underwriting decisions, but failing to "gross up" non - taxable income. Such a practice could have a disparate impact on the elderly and individuals with disabilities. The Community Reinvestment Act (CRA) was enacted as Title VII of the Housing and Community Development Act of 1977. CRA was designed to encourage banks and other