Watch Out for Housing/Mortgage Discrimination

According to the National Fair Housing Alliance’s annual report, housing discrimination is on the rise. “Last year, 30,758 complaints of housing discrimination were filed, a nearly 14 percent increase from the previous year, and the highest number filed in a single year since the Department of Housing and Urban Development (HUD) started keeping track in 1990.”

While most people are probably only vaguely aware that housing discrimination is illegal, few can be expected to understand exactly what is stipulated by the law. Simply stated, “The Fair Housing Act prohibits housing discrimination on the basis of race, color, national origin, religion, sex, familial status and disability.” The latter two- familial status and disability- may come as a surprise to those on the selling/renting end of the transaction.

To be clear, it’s against the law to not sell/rent out to someone simply because they have kids. From the standpoint of disabilities, not only can you not exclude the blind, deaf, handicapped, but also you are expected to make special accommodations for such people, such as allowing a service animal (even when pets are forbidden to other tenants) or facilitating wheelchair accessibility. “People think, ‘If I treat everybody the same, it’s OK, I’m not discriminating.’ You have to do something different with the blind person,” informs one expert.

In addition, “Research and investigations continue to show that some real estate agents engage in racial steering — a practice that keeps buyers from even viewing homes in neighborhoods where their race does not predominate.” A similar phenomenon is known as red-lining, which involves denying mortgages to those wising to buy in minority areas.

The law, naturally, also applies to mortgage transactions. This facet is gaining more attention in light of the subprime crisis, which is disproportionately affecting minorities. “27.6% of home purchase loans issued to Hispanics in 2007 and 33.5% of the ones issued to blacks were higher priced loans, compared with just 10.5% of home purchase loans obtained by whites.”

The New York Times recently reported that, ”A study released this week by the Pew Research Center also shows foreclosure taking the heaviest toll on counties that have black and Latino majorities, with the New York region among the badly hit.” The charge is that such minorities were unfairly steered towards subprime loans, although it’s not clear from the report whether that necessarily increased the likelihood of foreclosure.

During the expansion, this was considered a boon for minorities, who swelled among the ranks of homeowners like never before. According to the Pew report, however, minorities “Although minorities benefited the most from the surge in home buying after 1994, they also lost more in the post-2005 slump.” In other words, the areas where subprime loans predominated where also areas heavily populated by minorities.

It’s difficult to tell whether this inherently amounts to discrimination, but the important thing is that you know your rights as a homeowner/renter, and also that you stay on the right side of the law as a seller. If you feel you have been the victim of discrimination, you may want to consider filing a complaint with your local nonprofit fair-housing center.