Transaction Description:
PURPOSE: PURPOSE: THE MISSION OF THE FAIR HOUSING JUSTICE CENTER (FHJC) IS TO ELIMINATE HOUSING DISCRIMINATION; PROMOTE POLICIES AND PROGRAMS THAT FOSTER OPEN, ACCESSIBLE, AND INCLUSIVE COMMUNITIES; AND STRENGTHEN ENFORCEMENT OF FAIR HOUSING LAWS. THE FHJC IS SEEKING AN FY2024 FHIP FHOI CONTINUING DEVELOPMENT COMPONENT GRANT TO PROVIDE HIGH-QUALITY COMPREHENSIVE FAIR HOUSING TESTING SERVICES AND ENFORCEMENT ACTIVITIES, SPECIFICALLY IN PRE-APPLICATION MORTGAGE LENDING PRACTICES OF HOUSING SALES LENDERS.; ACTIVITIES TO BE PERFORMED: ACTIVITIES TO BE PERFORMED: THE FHJC WILL CONDUCT 35 FAIR HOUSING TESTS ACROSS ITS SERVICE AREA. INVESTIGATIONS WILL BE SYSTEMIC AND FOCUSED ON PRE-APPLICATION MORTGAGE LENDING PRACTICES AND HOUSING SALES TO DETERMINE WHETHER HOME BUYERS ARE BEING AFFORDED THE SAME SERVICE, TREATMENT, AND INFORMATION ABOUT AND ACCESS TO MORTGAGE FINANCING SERVICES AND PRODUCTS WITHOUT DISCRIMINATING BASED ON PROTECTED CHARACTERISTICS UNDER THE FEDERAL FAIR HOUSING ACT AND APPLICABLE LOCAL AND STATE LAWS. TESTING WILL FOCUS ON LENDERS LOCATED IN TOWNS, CITIES AND NEIGHBORHOODS THAT HAVE HISTORICALLY EXPERIENCED AND ARE EXPERIENCING PATTERNS OF RACIAL SEGREGATION. AS THE FHJC IS THE ONLY FULL SERVICE FAIR HOUSING ORGANIZATION OPERATING WITHIN THE FIVE NEW YORK CITY BOROUGHS, AND THERE IS A LACK OF LENDING TESTING HAPPENING IN THE REST OF THE NEW YORK CITY REGION, THERE WILL BE NO SHORTAGE OF AREAS AND ENTITIES ON WHICH TO FOCUS TESTING. LENDER TESTING INVESTIGATIONS ARE EXTREMELY TIME-CONSUMING, INVOLVE COMPLEX TRANSACTIONS, REQUIRE CAREFUL DESIGN AND SUPERVISION BY A SKILLED INVESTIGATIVE COORDINATOR, AND MUST BE EXECUTED BY TESTERS WHO ARE WELL-TRAINED AND WHO HAVE EXCEPTIONAL ACTING ABILITIES. THE FHJC HIRES AND TRAINS PROFESSIONAL ACTORS TO CONDUCT LENDING TESTS, AND THE FHJC’S NATIONAL PROJECTS AND INVESTIGATIONS COORDINATOR (PROPOSED PROJECT MANAGER) AND NATIONAL FIELD CONSULTANT HAVE EXTENSIVE EXPERIENCE IN LENDING TESTING. THEY ARE TRAINERS FOR THE HUD FHIP FUNDED INVESTIGATIVE SUPPORT FOR TESTING AND ENFORCEMENT PROGRAMS (ISTEP). IN THIS CAPACITY THEY HAVE TRAINED HUNDREDS OF INVESTIGATIVE COORDINATORS ACROSS THE COUNTRY IN BEST PRACTICES FOR FAIR HOUSING TESTING IN SALES, LENDING, AND RENTALS. THEIR EXPERIENCE IS FURTHER DESCRIBED IN THE STAFF EXPERIENCE AND EXPERTISE SECTION. THE FHJC CURRENTLY EMPLOYS 8 INVESTIGATIVE COORDINATORS, INCLUDING A DIRECTOR OF INVESTIGATIONS (8 YEARS GENERAL TESTING EXPERIENCE), A NATIONAL PROJECTS AND INVESTIGATIONS COORDINATOR (6 YEARS GENERAL TESTING EXPERIENCE), AND A NATIONAL FIELD CONSULTANT (48 YEARS GENERAL TESTING EXPERIENCE), EACH OF WHOM SUPERVISES TESTING INVESTIGATIONS. THE FHJC ALSO EMPLOYS AN EVIDENCE MANAGER (4 YEARS OF EXPERIENCE) WHO PROVIDES SUPPORT TO THE INVESTIGATIVE COORDINATORS AND IS RESPONSIBLE FOR THE CONTROL, TRANSFER, MAINTENANCE, AND STORAGE OF ALL TESTING DATA AND EVIDENCE. MANY OF THESE STAFF MEMBERS HAVE DIRECT EXPERIENCE CONDUCTING LENDING AND SALES TESTING. THE FHJC HAS ALSO DEVELOPED WHAT IS LIKELY THE MOST PROFESSIONAL AND EXTENSIVE POOL OF TESTERS IN THE COUNTRY.; EXPECTED OUTCOMES: EXPECTED OUTCOMES: TO OVERCOME THE SIGNIFICANT EXISTING BARRIERS OF SYSTEMIC DISCRIMINATION AND SEGREGATION, THE FHJC USES EVIDENCE THAT REVEALS A PATTERN OF SYSTEMIC DISCRIMINATION TO BRING ENFORCEMENT ACTIONS AGAINST HOUSING PROVIDERS, REAL ESTATE AGENTS, AND LENDING INSTITUTIONS. ENFORCEMENT ACTIONS WILL INCLUDE FILING LAWSUITS AND ADMINISTRATIVE COMPLAINTS WITH LOCAL, STATE, AND FEDERAL AGENCIES. THE FHJC WILL ALSO PROVIDE INTAKE COUNSELING TO INDIVIDUALS WHO BELIEVE THEY HAVE BEEN DISCRIMINATED AGAINST IN THE LENDING CONTEXT, AND REFERRALS TO LEGAL COUNSEL IF APPROPRIATE. IF THESE INDIVIDUALS BRING THEIR OWN ENFORCEMENT ACTIONS, THE FHJC WILL BE AVAILABLE IF NEEDED. THE FHJC’S OUTREACH, SOCIAL MEDIA, AND WRITTEN MATERIAL DISTRIBUTED AS PART OF THIS PROJECT WILL ENSURE THAT ADVOCATES AND AFFECTED COMMUNITY MEMBERS UNDERSTAND THEIR FAIR HOUSING RIGHTS, KNOW HOW TO TAKE ADVANTAGE OF THE FHJC’S SERVICES, ARE ABLE TO ENGAGE IN SELF-ADVOCACY, AND ARE AWARE OF WHERE THEY CAN BRING AN ENFORCEMENT ACTION. THE FHJC COLLECTS EVIDENCE IN AN IMPARTIAL MANNER, DOCUMENTING THE EVERYDAY, UNVARNISHED BUSINESS OPERATIONS OF HOUSING PROVIDERS. AS SUCH, IT IS NOT POSSIBLE OR APPROPRIATE TO PREDICT OR ESTIMATE THE NUMBER OR NATURE OF ENFORCEMENT ACTIONS IT WILL FILE. THIS WOULD ALSO HAVE THE POSSIBLE EFFECT OF COMPROMISING ITS LAWSUITS. HOWEVER, IT IS PRUDENT TO NOTE THAT THE FHJC’S SERVICE AREA HAS A POPULATION OF OVER THIRTEEN MILLION PEOPLE, INCLUDING THE NATION’S LARGEST CITY. THE SCALE OF FAIR HOUSING INVESTIGATIONS IN THIS AREA REMAINS WOEFULLY INADEQUATE AND THE FHJC’S LITIGATION PROGRAM IS ROBUST AND SUCCESSFUL. IN CONSIDERING THE EXPECTED OUTCOMES OF THIS PROJECT, PAST FHJC LAWSUITS ARE INSTRUCTIVE. IN FEBRUARY 2015, THE FHJC AND NINE BLACK, LATINO, ASIAN, AND WHITE TESTERS FILED A FEDERAL LAWSUIT AGAINST M&T BANK, THE 17TH LARGEST BANK IN THE UNITED STATES, ALLEGING THAT THE BANK WAS ENGAGED IN DISCRIMINATION BASED ON RACE AND NATIONAL ORIGIN. THE CASE, FHJC ET AL. V. M&T BANK ET AL., IS BELIEVED TO BE THE FIRST LAWSUIT FILED UNDER THE FEDERAL FAIR HOUSING ACT ALLEGING RACE AND NATIONAL ORIGIN DISCRIMINATION BASED PRIMARILY ON EVIDENCE COLLECTED THROUGH A PRE-APPLICATION MORTGAGE LENDER TESTING INVESTIGATION. IN AUGUST 2015, THE CASE WAS RESOLVED FOR A TOTAL MONETARY RECOVERY OF $485,000 AND EXTENSIVE INJUNCTIVE RELIEF, INCLUDING ADOPTING A BANK-WIDE POLICY PROHIBITING STEERING, POSTING ITS REVISED FAIR LENDING POLICY ON ITS WEBSITE, AND RETAINING A CONSULTANT TO REVISE ITS FAIR LENDING TRAINING FOR LOAN OFFICERS AND OTHER BANK EMPLOYEES. M&T LOAN OFFICERS IN THE FHJC’S SERVICE AREA ARE NOW PROVIDING WRITTEN ESTIMATES, UPON REQUEST, TO CONSUMERS CONCERNING LOAN AMOUNTS, LOAN PRODUCTS, HOME PURCHASE PRICES, INTEREST RATES, AND DOWN PAYMENT REQUIREMENTS. IN NOVEMBER 2016, THE FHJC FILED A SUIT AGAINST ULSTER SAVINGS BANK FOR LENDING DISCRIMINATION, ALSO BASED ON EVIDENCE GATHERED IN PRE-APPLICATION LENDING TESTING. THE FHJC CONDUCTED A TWO-YEAR TESTING INVESTIGATION, WHICH REVEALED THAT LOAN OFFICERS REPEATEDLY RECOMMENDED LOWER HOME PRICES AND LOAN AMOUNTS AND LESS FAVORABLE TERMS FOR BLACK APPLICANTS WHO PRESENTED BETTER QUALIFICATIONS—HIGHER INCOMES, MORE ASSETS, LESS DEBT, AND BETTER CREDIT SCORES—THAN THE WHITE TESTERS WITH WHOM THEY WERE MATCHED. IN THE 2017 LAWSUIT SETTLEMENT, ULSTER SAVINGS BANK AGREED TO EXTENSIVE INJUNCTIVE RELIEF.; INTENDED BENEFICIARIES: NTENDED BENEFICIARIES: THIS PROJECT WILL BENEFIT HOMEBUYERS IN THE NEW YORK CITY REGION WITH ANY CHARACTERISTIC THAT IS PROTECTED UNDER LOCAL, STATE, OR FEDERAL FAIR HOUSING LAWS. IN PARTICULAR, IT WILL FOCUS ON ELIMINATING DISCRIMINATION AGAINST PEOPLE WHO ARE BLACK, LATINO, OR ASIAN AMERICAN PACIFIC ISLANDER (AAPI) AND MENA (MIDDLE EASTERN AND NORTH AFRICAN) COMMUNITY MEMBERS, AS WELL AS IMMIGRANTS, ESPECIALLY THOSE WITH LIMITED ENGLISH PROFICIENCY (LEP). AMONG THESE GROUPS, THE FHJC SERVES COMMUNITIES THAT HAVE EXPERIENCED HISTORIC AND CONTINUING PATTERNS OF SEGREGATION, DISCRIMINATION, AND EXCLUSION IN HOUSING – ACROSS VARIOUS AND INTERSECTING LINES INCLUDING DISABILITY, LAWFUL SOURCE OF INCOME, SEX, SEXUAL ORIENTATION/GENDER IDENTITY, RELIGION, CITIZENSHIP/IMMIGRATION STATUS, FAMILIAL STATUS, AND AGE. MANY THEORIES HAVE BEEN ADVANCED OVER THE YEARS ABOUT WHAT TRANSPIRES WHEN EQUALLY QUALIFIED CONSUMERS OF DIFFERENT RACES AND NATIONAL ORIGINS CONTACT LENDERS TO SEEK FINANCING TO PURCHASE A HOME. TESTING IS ONE OF THE FEW INVESTIGATIVE TECHNIQUES THAT CAN BE USED TO OBSERVE EXACTLY WHAT OCCURS AT THE PRE-APPLICATION STAGE OF A MORTGAGE LENDING TRANSACTION. BECAUSE OF THE INSIDIOUS NATURE OF DISCRIMINATORY LENDING PRACTICES, IT IS OFTEN DIFFICULT FOR CONSUMERS OF DIFFERENT RACES AND NATIONAL ORIGINS TO KNOW IF LOAN OFFICERS ARE PROVIDING THE SAME LEVEL OF ASSISTANCE, SERVICE, TREATMENT, AND FINANCING INFORMATION WITHOUT SOME TYPE OF COMPARISON. TESTING IS THE ONLY INVESTIGATIVE TOOL THAT CAN PROVIDE A MEANINGFUL COMPARISON AT THE PRE APPLICATION STAGE OF A MORTGAGE LENDING TRANSACTION. THE WORK OF THE FHJC IN THIS AREA HAS BEEN GROUND-BREAKING AND SINCE LITTLE LENDER TESTING IS CONDUCTED NATIONALLY, IT HAS PROVIDED A FRAMEWORK FOR HOW TO DEVELOP MORTGAGE LENDING CASES BASED PRIMARILY ON TESTING EVIDENCE AT THE PRE-APPLICATION STAGE RATHER THAN SOLELY RELYING ON DATA OBTAINED AFTER AN INDIVIDUAL HAS APPLIED. THIS PROCESS HAS UNVEILED VALUABLE INSIGHTS INTO LENDER PRACTICES THAT HAVE NOT BEEN WIDELY RESEARCHED OR INVESTIGATED BY FAIR LENDING ENFORCEMENT AGENCIES. THE NEW YORK CITY REGION HAS ONE OF THE MOST DIVERSE POPULATIONS IN THE UNITED STATES, AND YET, HOUSING DISCRIMINATION AND RESIDENTIAL SEGREGATION ARE DEEPLY PERVASIVE. BY APPLYING A DISSIMILARITY INDEX TO 2020 CENSUS DATA, RESEARCHERS HAVE SHOWN THAT NEW YORK CITY IS ONE OF THE MOST SEGREGATED METROPOLITAN REGIONS IN THE COUNTRY. IT REMAINS ONE OF SIX METROPOLITAN REGIONS WITH A SEGREGATION INDEX ABOVE 80. OF THE 50 METROPOLITAN AREAS IN THE NATION WITH THE LARGEST BLACK, LATINO, AND AAPI POPULATIONS, THE NEW YORK REGION RANKS AS ONE OF THE MOST SEGREGATED AREAS FOR ALL THREE GROUPS. THIS PROJECT WILL BENEFIT PEOPLE OF COLOR WHO LIVE IN SEGREGATED COMMUNITIES AND ALLOW THEM TO LIVE WITHOUT PENALTY IN NEIGHBORHOODS OF THEIR CHOICE. FURTHERMORE, THIS PROJECT WILL BENEFIT ALL RESIDENTS OF THE NEW YORK CITY REGION. HOUSING DISCRIMINATION DOES IMMENSE HARM NOT ONLY TO FAMILIES AND INDIVIDUALS, BUT TO ENTIRE COMMUNITIES. HOUSING DISCRIMINATION NOT ONLY RESTRICTS HOUSING CHOICE BUT ALSO PERPETUATES RESIDENTIAL SEGREGATION. SEGREGATION OFTEN LEADS TO FURTHER DISENFRANCHISEMENT, AS COMMUNITIES OF COLOR, BASED ON THE ZIP CODES TO WHICH THEY ARE CONFINED, FACE ADDITIONAL BARRIERS IN THEIR ACCESS TO HEALTHCARE, EDUCATION, TRANSPORTATION, AND EMPLOYMENT. THIS PROJECT WILL HELP ADDRESS THIS LEGACY OF HISTORICAL DISCRIMINATION.; SUBRECIPIENT ACTIVITIES: NONE
