Recently the U.S. Department of Housing and Urban Development (HUD) approved a Conciliation Agreement resolving claims brought by three homeowners, a couple and an individual, against loanDepot.com, LLC, and Appraisal Management Services of America, Inc. The three alleged that the lender refused to refinance their homes because they are on Native American lands. The individual also claimed that loanDepot.com would not refinance his house because he is Native American.
The Fair Housing Act prohibits housing discrimination in mortgage lending and real estate-related transactions based on race, color, national origin, religion, sex, familial status and disability.
“A homeowner’s creditworthiness and ability to pay should be the only thing that matters when they apply for a mortgage, not their race or the fact that their home is located on Native American lands,” said Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity. “Today’s agreement sends a loud and clear message that HUD is committed to ensuring that lenders and other companies involved in the home mortgage process meet their obligations under the Fair Housing Act.”
The cases came to HUD’s attention when the couple from Belcourt, North Dakota, and the homeowner from Hoopa, California, filed complaints alleging that loanDepot,com refused to refinance their homes, which they owned in fee simple but within American Indian reservations. In one case, Appraisal Management Services of America informed loanDepot.com that it could not provide an appraisal on the home because it was on “Indian land.” LoanDepot.com and Appraisal Management Services of America deny discriminating against the three homeowners.
Under the terms of the agreement, loanDepot.com will pay the couple and the other homeowner $30,000 each and fund a loan subsidy program in the amount of $40,000 that will benefit prospective borrowers on American Indian Reservations. LoanDepot.com also will provide $240,000 to support outreach programs that improve housing conditions, teach financial literacy, and provide home ownership education to American Indians on and around reservations. In addition, loanDepot.com will revise its policies regarding the underwriting of home mortgage loans on land located within the boundaries of American Indian reservations to ensure that its policies are consistent with the requirements of the Fair Housing Act.
Appraisal Management Services of America, Inc., will revise its policies regarding appraisals for mortgages on homes located on American Indian reservations and no longer contract with appraisers who refuse to conduct appraisals on reservations.
A copy of the agreement is available at https://www.hud.gov/sites/dfiles/FHEO/documents/18CA.pdf