Fair Housing - Chapters 7-12

Question 1

What are federal and CA anti-discrimination laws?

Answer 1

The federal (Civil Rights Act) and CA anti-discrimination laws are in place to protect all buyers and renters. A broker has the duty to inform their agents and employees of anti-discrim rules including:

• DRE regulations
• the Unruh Civil Rights Act
• the CA Fair Employment and Housing Act
• the Federal Fair Housing Act (FFHA)

CA law prohibits discrim in house sales or rentals based on race, color, religion, sex, sexual orientation, gender identity, genetic information, marital status, national origin, ancestry, familial status, source of income.

Question 2

How do civil rights and fair housing laws affect the management of residential and nonresidential rental property?

Answer 2

While the Civil Rights Act provides a general protection against all prohibited discriminatory activity, the Federal Fair Housing Act (FFHA) prohibits any discriminatory actions a seller, seller’s agent, landlord or property manager may take specifically in the handling of dwellings, including rentals, based on race, color, national origin, religion, sex, familial status or handicap.

Question 3

blockbusting

Answer 3

Blockbusting is the prohibited practice of a real estate licensee inducing a property owner to list their property for sale in response to a change taking place in the neighborhood demographics.

When an agent encourages an owner to offer their home for sale or rent because of a change taking place (or about to take place) in the neighborhood. Also when the licensee discourages an owner/occupant from offering their home because they don’t want the ‘entry of others’ in the neighborhood.

Question 4

Civil Rights Act

Answer 4

The federal Civil Rights Act applies to RACE discrimination on the sale or rental of all types of real estate both residential or commercial.

Question 5

disabled person

Answer 5

A disabled person is anyone who:

• has a physical or mental impairment which significantly limits major life activities
• has a record of disability
• is regarded as being disabled (like someone with HIV)

Disabled persons are protected when renting or leasing CA residential real estate, however the landlord is not required to structurally modify existing residential rental property to meet their need.

Question 6

dwelling

Answer 6

A dwelling is a building (or vacant land to be used for mobile home) or structure that is to be occupied, or designed to be occupied, as a residence by one or more families.

Question 7

familial status

Answer 7

Familial Status is a status which indicates a household includes individuals under the age of 18.

Rental policies excluding children under 18 are classified as prohibited, unless the property qualifies as senior citizen housing.

Question 8

Federal Fair Housing Act (FFHA)

Answer 8

While the Civil Rights Act provides a general protection against all prohibited discriminatory activity, the Federal Fair Housing Act (FFHA) protections are specifically limited to dwellings, including rentals. The FFHA is a collection of policies designed to prevent discrimination in the access to housing based on an occupant’s inclusion in a protected class.

Question 9

steering

Answer 9

Steering involves the restriction of an individual seeking to rent or purchase a dwelling in a community, neighborhood or development, when the guidance perpetuates segregated housing patterns.

The act of steering is an unlawful housing practice that includes words or actions by a RE sales licensee intended to influence the choice of a prospective buyer or tenant.

Question 10

Unruh Civil Rights Act

Answer 10

California’s Unruh Civil Rights Act, is another anti-discrimination law, which prohibits discrimination by a BUSINESS ESTABLISHMENT based on sex, race, color, religion, ancestry, national origin, disability or medical condition. A RE practice is a business establishment.

Question 11

Recognize the agencies who enforce housing anti-discrimination rules in CA

Answer 11

The agencies that enforce anti-discrimination rules are:

California CA:

• DRE Regulations
• the CA Unruh Civil Rights Act (prevents BIZ discrim)
• the CA Department of Fair Employment and Housing

Federal

• the Civil Rights Act
• the Federal Fair Housing Act (FFHA)

Question 12

Department of Fair Employment and Housing

Answer 12

The CA Department of Fair Employment and Housing is the California government agency which enforces anti-discrimination laws. Designated to protect Californians from housing, employment, and public accommodation discrimination.

California anti-discrimination law is enforced by the Department of Fair Employment and Housing and the Fair Employment and Housing Commission.

Question 13

discriminatory practices

Answer 13

Discriminatory practices include

• MAKING AN INQUIRY, written or oral, into the race, sex, disability, etc. of any individual seeing to rent or purchase housing
• Publishing ads or notices for the sale or rental of housing which INDICATE a PREFERENCE
• Use of these prohibited practices when providing or ARRANGING RE MORTGAGES & FIANCING
• refusal based on prohibited factor by a broker to REPRESENT an individual in a RE transaction
• any other practice that DENIES HOUSING to a member of a protected class

Question 14

implicit discrimination

Answer 14

Implicit discrimination occurs when the actions are not openly discriminatory but yield discriminatory results. The actions are SUBTLE.

Question 15

senior citizen housing

Answer 15

Senior Citizen Housing is housing intended for individual 55 or 62 years of age or older.

Question 16

Understand the CA State Law that prohibits discriminatory lending practices

Answer 16

The CA Housing Financial Discrimination Act of 1977 is the CA State Law that prohibits discriminatory lending practices and targets to help to achieve and maintain a healthy state economy and an efficient RE market.

Question 17

Identify the practices in lending and mortgage brokering which are considered discriminatory

Answer 17

A lender may not engage in discriminatory practice by

• denying or approving financing to creditworthy mortgage applicants based on the applicant’s race, color, religion, sex, marital status, national origin, ancestry, or any other protected classifications. They may not refuse to fund a mortgage based on the demographics of that community.
• appraising RE in that community at a lower value than comparable RE in communities predominately composed of non-minorities.

Question 18

redlining

Answer 18

The practice of REDLINING is the failure to provide financing or insurance in certain communities based on the demographics of that community. Redlining discourages home ownership in minority communities and thus has adverse effects on the economic and social health of those communities. Denial CAN be based on neighborhood conditions, but CAN NOT be based on neighborhood demographic characteristics.

Think of: Red line not FINE (for FINancing) or RED-FIN

Question 19

What are the protected classes under the Equal Credit Opportunity Act?

Answer 19

The protected classes under the FEDERAL Equal Credit Opportunity Act are race, color, religion, national origin, sex, marital status, and age.

Question 20

Who is subject to the rules of the Equal Credit Opportunity Act?

Answer 20

The Equal Credit Opportunity Act’s anti-discriminatory rules apply to institutional lenders, mortgage brokers, and other who make or arrange mortgages. Equal ‘CREDIT’ - they are providing credit

Question 21

Describe the exemptions from the anit-discrimination rules under the Equal Credit Opportunity Act?

Answer 21

Examples of those EXEMPT from the anit-discriminatory rules include:

• a lender’s consideration of an applicant’s age,
• their reliance on public assistance program income
• or immigration status when determining creditworthiness.

Question 22

credit reporting agency

Answer 22

In addition to the Equal Credit Opportunity Act, CA law controls credit reporting agencies. A credit reporting agency is a private agency which collects and reports information regarding an individuals credit history. Consumers may request a FREE copy of their credit report once every year to review it for errors.

Question 23

Equal Credit Opportunity Act

Answer 23

The Equal Credit Opportunity Act is a FEDERALLY established program enacted in 1974 prohibiting lenders from discriminating against borrowers based on race, color, religion, national origin, sex, marital status, or age.

Question 24

What are the social goals of the federal Home Mortgage Disclosure Act (HMDA)?

Answer 24

The social goals of the Home Mortgage Disclosure Act (HMDA) is to gather mortgage statistics (mortgage type, geographical area, and census tract) to help identify lending patterns and to prevent lending discrimination. We are disclosing mortgage stats and info.

Question 25

Identify which lenders and mortgage types the Home Mortgage Disclosure Act (HMDA) applies to

Answer 25

Under the Home Mortgage Disclosure Act, lenders with total assets of more than $28 million and FOR-PROFIT mortgage brokers with total assets of more than $10 million need to compile mortgage origination data and make it available to the public.

Question 26

find and interpret the data required for Home Mortgage Disclosure Act (HMDA) disclosure statments

Answer 26

State and federally regulated banks are to maintain mortgage data for the Home Mortgage Disclosure Act (HMDA) on:

• the type and purpose of mortgage
• the owner-occupancy status of the property
• the amount of mortgage
• the action taken by lender (approved or not approved)
• the sex, race, and national origin of the mortgage applicant, demographics
• the income of the mortgage applicant, demographics

The data is then grouped according to mortgage type, geographical area, and census tract. This data is compiled by the Federal Financial Institutions Council into a disclosure statement sent back to the lender.

Question 27

debt-to-income (DTI) ratio

Answer 27

The debt-to-income (DTI) ratio is the percentage of monthly gross income that goes towards paying debt.

Question 28

Home Mortgage Disclosure Act (HMDA)

Answer 28

The federal Home Mortgage Disclosure Act (HMDA) prevents lending discrimination and unlawful redlining practices on residential or home improvement mortgages. The HMDA requires lenders to disclose information on their home mortgage originations to the public.

Question 29

What types of advertising is considered discriminatory under the Federal Fair Housing Act (FFHA)?

Answer 29

Types of advertising that is considered discriminatory under the Federal Fair Housing Act (FFHA) include:

• the printing or pub of an advertisement for the sale or rental of a residential property that indicates a wrongful DISCRIMINATORY PRACTICE. this includes the selective use of words and phrases
• selective stereotypical use of MEDIA or HUMAN MODELS in an ad campaign

Question 30

What are the Department of Housing and Urban Development (HUD) guidelines to avoid discriminatory preferences in advertising

Answer 30

The Dept of Housing and Urban Development (HUD) issues guidelines for controlling advertising for dwellings and to avoid discriminatory practices by requiring that real estate brokers selling or renting a residential DWELLING to display a FAIR HOUSING POSTER.

The broker is to display the fair housing poster in the place of business by brokers, agents, developers, and landlords and the dwelling offered, except for single family homes other than ‘Davidson’ models.

Question 31

What are the consequences of failing to follow HUD advertising guidelines?

Answer 31

Even though it is required, a broker will not be subject to any penalties for failing to display the FAIR HOUSING POSTER. However, licensees following the HUD advertising and poster guidelines are in a better position to defend themselves against a fair housing lawsuit.