Are we in a time warp? Are we back in the 80’s?
On September 15, 2014 the Department of Housing and Urban Development (HUD) announced a settlement agreement with U.S. Bank National Association, U.S. Bank subsidiary Red Sky Risk Services, LLC (formerly known as USB Lending Support Services, LLC), and one of U.S. Bank’s loan officers, resolving allegations that they refused to refinance the mortgage of a Native American couple in Belcourt, North Dakota, because their property is located on a reservation.
The agreement settles a complaint that was filed by a Native American couple alleging that U.S. Bank, the bank’s appraiser Red Sky Risk Services, and one of the bank’s loan officers discriminated against the couple when they attempted to refinance their home loan. In denying the couple’s loan application, U.S. Bank allegedly determined that the “value or type of collateral was not sufficient.” The loan officer allegedly told the couple that, because their property is located on a Native American reservation, U.S. Bank was not able to make the loan and that Red Sky Risk Services was not able to appraise the property.
The property, located within the Turtle Mountain Indian Reservation, is held in “fee simple,” which means that the couple holds the title to the property, without restriction, in the same way that land is generally held throughout the United States.
Under the terms of the agreement, U.S. Bank agreed to pay the couple’s U.S. Bank credit card balance in the amount of $11,489.56, and to approve their application for a home mortgage refinance loan with a fixed-rate of 2.99%, and, among other terms and conditions, agreed to waive closing costs. U.S. Bank and Red Sky Risk Services also agreed to amend their policies regarding home mortgage loans on land located within the boundaries of a Native American reservation to be consistent with the Fair Housing Act and to provide fair housing training for their employees.
There were a number of similar cases years ago, but the issue of discrimination against Native Americans has been quiet for years. The settlement is typical in most respects, but agreeing to pay-off existing debt that is unrelated to the transaction in question is unique.
Everything that is old is new again.