Exam Review CH 5

Which of these map directions to a real estate development could be considered discriminatory?

"Turn right just past the entrance to Upper Crust Country Club." "Just a half mile beyond the statue of Toribio Losoya." "Just one block down from St. Patrick elementary school."

If a woman who is a homeowner wants to take in a boarder, can she advertise the rental unit for a "single, white, older, Christian woman"?

-No, the advertisement clearly discriminates on the basis of race. -No, the advertisement clearly discriminates on the basis of age. -No, the advertisement clearly discriminates on the basis of religion.

What is the reasoning MOST lenders gave for "redlining" neighborhoods?

-The redlined communities were heavily populated by blacks and Hispanics. -Banks were fearful of too many payment defaults from geographic areas. -The redlined communities were heavily populated by low-income people.

What is a "substantial equivalency" fair housing law?

A state or local law that is basically the same as the federal fair housing law The state or local law would have the same protected classes and similar fines or other punishments.

In the creation of real estate advertising, which of the following is the BEST way to comply with fair housing laws?

Agents describe characteristics of properties—square footage, amenities—rather than the people who are logical candidates to live there.

Which requires equal access in employment, government activities, public accommodations, commercial facilities, transportation, and telecommunications?

Americans with Disabilities Act (ADA)

Blockbusting

Blockbusting is inducing homeowners to sell below market prices by claiming that members of a certain race, color, religion, sex, national origin, disability, or familial status are entering the area.

A borrower wants to determine a lending institution's participation in low- and moderate-income housing, community development, rehab projects, and in loan programs for small businesses and small farms. Which law requires a report that the borrower can request from the lender?

Community Reinvestment Act (CRA)

Which requires that lenders serve their local communities first—to meet the deposit and credit needs of their low-income and moderate-income housing communities?

Community Reinvestment Act (CRA)

Which of the following illustrates what the government means by "selective use of advertising media or content"?

Doing a mailing to "just white neighborhoods" or placing billboards where only Hispanics are likely to see them

Which is designed to make credit available to every financially qualified applicant?

Equal Credit Opportunity Act (ECOA)

If a borrower or a public official is concerned that a lending institution might be practicing redlining, which law requires a public reporting of economic and ethnic characteristics of neighborhoods served?

Home Mortgage Disclosure Act (HMDA)

Which requires lenders to report income and ethnicity data of loan applicants, as well as the type of loan applied for, where the property is located, and whether the application was approved, denied, or withdrawn?

Home Mortgage Disclosure Act (HMDA) The HMDA was passed to stop the process of redlining, in which certain areas of a community were excluded from eligibility for home loans as though red lines were drawn around them. It requires mortgage lenders to collect and report data to assist in identifying possible discriminatory lending practices: the race or ethnicity, sex, and income of mortgage applicants, as well as the type of loan they want, where the property is located by census tract, and whether the application was approved, denied, or withdrawn.

Rather than outlaw specific words and phrases from the advertising of real estate, the federal court has established what test to determine whether an advertisement is discriminatory?

How an ordinary reader would interpret the ad The court ruled that a clever advertising writer could easily write around words and phrases but still make a discriminatory message clear. The court said, therefore, that an ad would be deemed discriminatory if an "ordinary reader" found it to be discriminatory.

Who is allowed to send paired testers to apartments to check for fair housing mistreatment?

Independent nonprofit civic groups interested in enforcing the law Agents of the State of Texas Agents of the federal government

Which court decision is still cited in lawsuits concerning fair housing discrimination?

Jones v. Mayer The decision barred all racial discrimination, private as well as public, in the sale or rental of property. The decision was handed down in 1968, more than 100 years after the first Civil Rights Act.

Are lenders required by law to attempt to identify borrowers by race, national origin, gender, and ethnicity, and are borrowers required to provide the data?

Lenders are required to ask, but borrowers need not offer the information.

Which phrase, when used in advertising, would be considered unacceptable?

No children under six years of age Advertisements, notices, or statements may not indicate a preference, limitation, or discrimination with regard to any fair-housing-protected classification. Descriptions of properties and symbols or terms relating to religious holidays are acceptable.

Does ECOA apply to all lenders?

No, ECOA applies only persons or institutions that make loans on a regular basis.

Can neighborhood homeowners and associations demand that real estate brokerages not show their properties to lesbian, gay, bisexual, or transgender individuals?

No, banning LGBT individuals would violate fair housing law.

If a landlord receives a rental application online for an available apartment but determines in the course of an in-person interview that the applicant is a follower of Islam, may the landlord introduce extraordinary fees and deposits in an effort to persuade the applicant to go somewhere else?

No, charging additional fees and deposits to force an individual to go elsewhere is considered a violation of fair housing law.

If an LGBT homebuyer assertively instructs his contracted buyer agent to "only show me homes in conservative Christian neighborhoods," is the buyer agent obligated to comply?

No, complying would be a violation of fair housing law.

Would it be discriminatory for a buyer agent to decline to accompany a client to an open house for a home in a neighborhood the agent knows the buyer cannot afford?

No, it is not discriminatory. Open houses tend to be open to the public, but buyer agents are within their rights to marshal their time in endeavors that are likely to produce business. There typically would be no bar to the browsing buyer walking through the home.

Do private lenders, churches, or sellers who take back notes have to comply with fair lending laws?

No, private lenders can create their own rules if they do not plan to sell the mortgage on the secondary market.

Can Mrs. Murphy escape the rules of fair housing law if she rents one part of her home to a family, another part of the home to the elderly grandparents of the family, and another unit to the adult, single-parent child of the family?

No, she would lose her exemption because the families in her home must live independently of each other.

If a FSBO owner, who only owns one property, advertises it for sale in a newspaper but then refuses to show it to a disabled veteran, is the FSBO owner in violation of fair housing law?

No, the FSBO is not guilty of discrimination.

If buyers ask their sales associate to only show them homes within walking distance of a synagogue, is that discrimination?

No, the buyer is stating a legal preference for a living accommodation. Homebuyers are entitled to provide instructions to their agents. Agents may comply with this request.

If a minority individual renting an apartment is charged with the manufacture and distribution of methamphetamine, may the landlord evict the renter?

No, the drug manufacturer cannot be evicted unless he is convicted.

Can a landlord decline to show a wheelchair-bound rental applicant an apartment on an upper floor?

No, the landlord is obligated to show any apartments that are within the price range of the applicant. It is always up to individual renters to determine what they can physically do or not do. If the applicant decides to rent the space, accommodations and adjustments can be negotiated.

If a property owner with fractional interest in a dozen rental units decides to sell his own home without a license holder, is the property owner exempt from fair housing law?

No, the property owner's fractional ownership in other properties would bring him under fair housing law.

Which court decision essentially undermined the Civil Rights Act of 1866?

Plessy v. Ferguson

Under the federal Fair Housing Act, a landlord may do which of the following if a real estate agent is NOT involved in the transaction?

Refuse, based on sex, to rent a room in an owner-occupied dwelling

Under the federal Fair Housing Act of 1968, which is permitted?

Restricting the rental of lodgings owned by a private club based on membership in the club

Steering

Steering, also known as channeling, is directing homeseekers or renters to particular areas to maintain the homogeneity of the area, thus steering them away from other areas. Steering promotes segregation.

A complaint of discrimination brought under the Texas Fair Housing Act can be filed with the U.S. Department of Housing and Urban Development or with the

Texas Workforce Commission Civil Rights Division (TWCCRD).

After the widespread race riots in the United States after 1968, what did the federally appointed National Advisory Commission on Civil Disorders determine?

That America was moving toward two separate but unequal societies, one black and one white It suggested the nation would tear itself apart if laws such as the Fair Housing Act were not aggressively enforced.

What notice are all publishers—whether on paper or electronic—required to carry if they are advertising real estate for sale?

That the publication will not knowingly accept any advertising that violates fair housing law

What tragic event helped spur passage of the Fair Housing Act of 1968?

The assassination of Martin Luther King Jr.

In 1962, President Kennedy issue an executive order (EO 11063) that prohibited discrimination in the sale, rental, or use of all residential property that was owned, operated, or financed by the federal government. What was the impact?

The impact was very small because the executive order lacked an enforcement provision.

Which situation is considered discriminatory under the federal Fair Housing Act?

The owner of a 20-unit apartment building refuses to rent apartments to women.

On certain higher-risk loans, on which lenders typically charge a higher interest rate, lenders are also required to report the spread. What does the term "spread" refer to?

The spread is the difference between the interest rate given and the interest rate that would have been available for a lower risk loan.

How is punishment for violating the racial aspects of fair housing law different from punishment for violations involving complaints about familial status?

There is no difference in punishment.

How long after a discriminatory action does an aggrieved party in a discrimination dispute have to bring a private enforcement action in state or federal district court?

Two years The private lawsuit can be filed even though an administrative complaint is filed with the Texas Workforce Commission Civil Rights Division (TWCCRD). However, if a conciliation agreement is entered on the complaint or if a hearing commences before an ALJ, the private lawsuit must be terminated.

Is it legal to ban medical doctors from living in neighborhoods if the residents object?

Yes, because doctors are not a protected class. However, neighborhoods that ban doctors—or just about any profession—are likely to draw scrutiny of fair housing leaders.

Would placing a for-rent advertisement that states "kids OK" represent a violation of the Fair Housing Act?

Yes, because it could be viewed as expressing a preference for families over seniors and single individuals

If a real estate license holder decides to sell his one personal residence as a FSBO but refuses to show it to a Muslim refugee family, is he in violation of fair housing law?

Yes, even though acting as a FSBO, no real estate license holder is exempt from fair housing law.

If a white buyer specifically requests to only be shown properties in "white" neighborhoods, is that discriminatory for the sales agent to comply with the request?

Yes, it is discriminatory.

Does the Fair Housing Act allow a childless, but pregnant, woman to claim protection under the familial status section of law?

Yes, pregnant women are protected under the familial status provisions of the law. It also would protect anyone who is currently seeking custody of a child under the age of 18.

Complaints of discrimination brought under the Civil Rights Act of 1866 must be taken directly to

a federal court.

The Equal Credit Opportunity Act (ECOA) prohibits lenders and others who grant or arrange credit to consumers from discriminating against credit applicants on the basis of race, color, religion,

national origin, sex, marital status, age, or dependence on public assistance.

An aggrieved person who believes illegal discrimination has occurred may file a complaint within _________________ of the alleged discriminatory act?

one year If the complaint is filed with HUD, the complaint will be referred to the Texas Workforce Commission Civil Rights Division (TWCCRD) because Texas has a HUD-approved "substantially equivalent" fair housing program that allows complaints to be heard at the state level rather than at the federal level.

A rarely challenged fair housing exemption is

religious organizations. Drug convictions and occupancy standards often are in the news, drug convictions because of their sensationalism and occupancy standards because the number of people living in a single-family home often has a cultural bias, especially for immigrants.

A lender must judge an applicant only on the basis of income, net worth, job stability, and credit rating as required by

the Equal Credit Opportunity Act (ECOA).

The seller of one single-family home would NOT be in violation of the Fair Housing Act even if

the owner discriminated on the basis of religion.

In determining whether an advertisement is discriminatory, HUD rules state it will look at three basic things. They are

whether the ad contains discriminatory words and symbols, whether photos only show members of a single race, and whether other considerations condemned under fair housing law are present, such as only showing young single people without families.