Why Haven’t Loan Officers Been Told These Facts?
April Is Fair Housing Month

2024 marks the 56th anniversary of the passage of Title VIII of the Civil Rights Act of 1968, also known as the Fair Housing Act, the landmark civil rights law signed by President Lyndon B. Johnson on April 11, 1968, that made discrimination in housing transactions unlawful.

The Act was signed into law one week to the day after Dr. Martin Luther King was gunned down in Memphis, Tennessee.

The Fair Housing Act prohibits discrimination in housing because of race, color national origin, religion, sex (including gender identity and sexual orientation), disability, and familial status. This year’s Fair Housing Month theme is “Fair Housing: The ‘Act’ in Action.”

HUD implements and promulgates the Act under the 24 Code of Federal Regulations, Part 100, Subpart C—Discrimination in Residential Real Estate-Related Transactions.

What Is Prohibited?

The Fair Housing Act makes it illegal to discriminate against someone because of race, color, religion, sex (including gender, gender identity, sexual orientation, and sexual harassment), familial status, national origin, or disability at any stage of the mortgage process, including:

  • Approvals and denials
  • Terms, e.g., interest rates, points, fees, and other costs
  • Advertising
  • Mortgage broker services
  • Property appraisals
  • Servicing
  • Home loan modification assistance
  • Homeowners Insurance

The Fair Housing Act prohibits discrimination in loans that are secured by residential real estate or that are for the purchasing, constructing, improving, repairing or maintaining a dwelling. This includes mortgages, refinancing, home equity loans and home improvement loans.

Examples of Lending Discrimination

Examples of lending discrimination include:

  • Denying a mortgage or charging a higher interest rate because the property is located in a majority-minority neighborhood
  • Providing a different customer service experience to mortgage applicants depending on their race, color, religion, sex (including gender identity and sexual orientation), familial status, national origin or disability
  • Refusing to consider a mortgage applicant’s disability-related income, such as SSI or SSDI
  • Steering a borrower to a loan with less favorable terms because of his or her race, color, religion, sex (including gender, gender identity, sexual orientation, and sexual harassment), familial status, national origin, or disability
  • Targeting a minority community for fraudulent home loan modification assistance

From HUD, The History of Fair Housing

On April 11, 1968, President Lyndon Johnson signed the Civil Rights Act of 1968, which was meant as a follow-up to the Civil Rights Act of 1964. The 1968 Act expanded on previous acts and prohibited discrimination concerning the sale, rental, and financing of housing based on race, religion, national origin, sex, (and as amended) handicap and family status. Title VIII of the Act is also known as the Fair Housing Act (of 1968).

The enactment of the federal Fair Housing Act on April 11, 1968 came only after a long and difficult journey. From 1966-1967, Congress regularly considered the fair housing bill, but failed to garner a strong enough majority for its passage. However, when the Rev. Dr. Martin Luther King, Jr. was assassinated on April 4, 1968, President Lyndon Johnson utilized this national tragedy to urge for the bill’s speedy Congressional approval. Since the 1966 open housing marches in Chicago, Dr. King’s name had been closely associated with the fair housing legislation. President Johnson viewed the Act as a fitting memorial to the man’s life work, and wished to have the Act passed prior to Dr. King’s funeral in Atlanta.

Another significant issue during this time period was the growing casualty list from Vietnam. The deaths in Vietnam fell heaviest upon young, poor African-American and Hispanic infantrymen. However, on the home front, these men’s families could not purchase or rent homes in certain residential developments on account of their race or national origin. Specialized organizations like the NAACP, the National Association of Real Estate Brokers (NAREB), the GI Forum, and the National Committee Against Discrimination In Housing lobbied hard for the Senate to pass the Fair Housing Act and remedy this inequity. Senators Edward Brooke and Edward Kennedy of Massachusetts argued deeply for the passage of this legislation. In particular, Senator Brooke, the first African-American ever to be elected to the Senate by popular vote, spoke personally of his return from World War II and inability to provide a home of his choice for his new family because of his race.

With the cities rioting after Dr. King’s assassination, and destruction mounting in every part of the United States, the words of President Johnson and Congressional leaders rang the Bell of Reason for the House of Representatives, who subsequently passed the Fair Housing Act. Without debate, the Senate followed the House in its passage of the Act, which President Johnson then signed into law.

The power to appoint the first officials administering the Act fell upon President Johnson’s successor, Richard Nixon. President Nixon tapped then Governor of Michigan, George Romney, for the post of Secretary of Housing and Urban Development. While serving as Governor, Secretary Romney had successfully campaigned for ratification of a state constitutional provision that prohibited discrimination in housing. President Nixon also appointed Samuel Simmons as the first Assistant Secretary for Equal Housing Opportunity.

When April 1969 arrived, HUD could not wait to celebrate the Act’s 1st Anniversary. Within that inaugural year, HUD completed the Title VIII Field Operations Handbook, and instituted a formalized complaint process. In truly festive fashion, HUD hosted a gala event in the Grand Ballroom of New York’s Plaza Hotel. From across the nation, advocates and politicians shared in this marvelous evening, including one of the organizations that started it all — the National Committee Against Discrimination In Housing.

In subsequent years, the tradition of celebrating Fair Housing Month grew larger and larger. Governors began to issue proclamations that designated April as “Fair Housing Month,” and schools across the country sponsored poster and essay contests that focused upon fair housing issues. Regional winners from these contests often enjoyed trips to Washington, DC for events with HUD and their Congressional representatives.

Under former Secretaries James T. Lynn and Carla Hills, with the cooperation of the National Association of Homebuilders, National Association of Realtors, and the American Advertising Council these groups adopted fair housing as their theme and provided “free” billboard space throughout the nation. These large 20-foot by 14-foot billboards placed the fair housing message in neighborhoods, industrial centers, agrarian regions and urban cores. Every region also had its own celebrations, meetings, dinners, contests and radio-television shows that featured HUD, state and private fair housing experts and officials. These celebrations continue the spirit behind the original passage of the Act, and are remembered fondly by those who were there from the beginning.

Join the HUD Fair Housing celebration here and in your community: Fair Housing Month at HUD

President Lyndon Johnson Signing The Civil Rights Act of 1968 (Title VIII of the Act is known as the Fair Housing Act)

 

Do you have a great value proposition you’d like to get in front of thousands of loan officers? Are you looking for talent?

BEHIND THE SCENES – HUD Provides $30,000,000 for Housing Discrimination Investigations and Lender Testing

April 2, 2024 WASHINGTON

The U.S. Department of Housing and Urban Development (HUD) is announcing today the award of over $30 million to fair housing organizations across the country under its Fair Housing Initiatives Program (FHIP). The grants will support the efforts of national, state, and local fair housing entities working to address violations of the Fair Housing Act and to end discrimination in housing.

HUD is awarding grants in the following categories and amounts:

Private Enforcement Initiative (PEI) – This initiative funds non-profit fair housing organizations to carry out testing and enforcement activities to prevent or eliminate discriminatory housing practices.

  • HUD is awarding $16,704,250 to organizations to conduct intake, provide testing, and investigate and litigate fair housing complaints under the Fair Housing Act.

Education and Outreach Initiative (EOI) – This program offers support for fair housing activities that educate the public and housing providers about equal opportunity in housing and compliance with the fair housing laws.

  • HUD is awarding $9,466,207 to organizations that educate the public and housing providers about the Fair Housing Act. These grants will also support state and local organizations that enhance fair housing laws that are substantially equivalent to the Fair Housing Act.

Education and Outreach Initiative Test Coordinator Training (EOI-TCT) – FHIP is a significant source of funding for grantees that conduct fair housing testing in local communities across the country. Fair housing testing refers to the use of testers who pose as prospective renters or buyers of real estate for the purpose of determining whether housing providers, real estate agents, appraisers, lenders, and others are complying with the Fair Housing Act.

  • HUD is awarding $500,000 to one organization to support fair housing training courses specifically in fair housing testing.

Fair Housing Organizations Initiative (FHOI) – This program provides funding that builds the capacity and effectiveness of non-profit fair housing organizations by providing funds to handle fair housing enforcement and education initiatives more effectively. FHOI also strengthens the fair housing movement nationally by encouraging the creation and growth of organizations that focus on the rights and needs of underserved groups, particularly persons with disabilities.

  • HUD is awarding $3,700,000 to nonprofit organizations to conduct fair housing enforcement related activities.

 

 

Tip of the Week – Post-Closing Consumer Contact
Loss Mitigation, Help Your Customers Know Their Rights

As discussed in previous LOSJ articles, building your professional value proposition can and should transcend loan origination. Hat-in-hand appeals for mortgage handouts happen when the provider’s substance or value is lacking. Not to knock originators who mostly drum up business by asking, “Do you have a mortgage for me or anyone I can talk to?” That can be very effective; however, in addition to asking for the business, most originators like having a specific value proposition to tender, something to propose to prospects – and for good reason. And yes, you can do both simultaneously: ask for the business and bring new or increased value to even greater effect.

Part of a successful business is expanding the potential pool of prospective consumers, which entails identifying new markets and then new marketing strategies. Business 101 dictates that your business impact is continuously increasing or shrinking. It never stands still. It only appears to be stable. Detecting your business impacts can be elusive. The growth or retreat of your business impact often involves subtle changes. This is why smaller or pilot sales and marketing projects are smart. You may more readily test your assumptions about how to grow your business when making more minor, incremental changes.

Dream big but implement in small measures. One way to right-size your implementation is to plan only those value-generating activities you can start and finish in the next week. If taking longer than a week, keep the implementation duration as short as possible.

A Simple Implementation For This Week

One way to expand your referral base and prospect pool is to broaden your value proposition. Anything you can do to increase your relevance regarding mortgage-related concerns is a step in that direction.

This week, determine to improve your professional value, remain relevant, and successfully solicit more business.

Give (Offers) and Take (Asking for Introductions to People AND Loans)

In addition to caring for your customers and those they care for, demonstrate your commitment to your larger community. Start with your borrowing customers and referral sources.

Loss mitigation can provoke a range of responses from borrowers. Few will argue against the goodness of helping those facing financial and housing insecurity. MLOs are uniquely situated in this regard. Servicers do what is best for Servicers. Who has the little guy’s back?

MLOs can be a wellspring of help, including assistance with servicing challenges. This help offer can be compelling when connecting with past customers. Suggest that your customers keep an “eye out for anyone needing help.” Let your sphere of influence know that you are the person to call when a person has any mortgage problems or questions.

Alternate your offers with requests for referrals. But don’t just ask if they know anyone who needs a mortgage. Instead, ask if they know anyone who has had difficulty finding a home or obtaining a mortgage. Sure, let them know you do easy loans, too. But don’t just market to people who have mentioned to someone they are looking for a mortgage. That is a tiny sliver of the people buying in the next 18 months.

If you exclusively target consumers who feel they need a mortgage, you are just another voice in a crowded room and already behind the eight ball. Notice how offers to help people sound better than requests for referrals. The subtle shift from an ask to an offer puts the emphasis on the needs of the consumer instead of the needs of the provider.

Years ago, I had a vendor rep whom I personally adored—mostly. Several times a quarter, he’d come groveling. Ostensibly, because of some contest his firm was waging, he wondered if I “could help him win the contest by giving him an order.” Now, that appeal might sway some of you, but it was a total turnoff for me. Utterly cringey. Do you come across that way to customers? That might be a winning pitch to a very amiable person, but for the rest of the folks, yikes.

Get to the consumer before they need the mortgage. That way, you will have many more prospects, which means greater networking possibilities. Broadening your prospect pool has an exponential benefit.

As has been suggested in other articles, ask if they know any teachers, firefighters, police officers, active duty, or retired military. Not all at once, one or two at a time. Let them know you also consult with professionals like attorneys, CPAs, and housing agencies.

Add to your offers, “Do you know anyone with mortgage servicing issues?”

Look for a coming issue of the Journal. Find out what your customers need to know to ensure they get the servicing attention they deserve.