Texas Principles of Real Estate I - Ch 5

What is testing?

- A simulated housing transaction designed to obtain evidence of differential treatment based on an individual's protected class status - Testers have similar/profiles and needs but different protected statuses - they visit real estate offices and ask to see the same unit to see treatment based on class

What is the general guideline for what is acceptable in advertising?

- Advertising that describes the property is acceptable - Advertising that describes the buyer is discriminatory

What is blockbusting? What are the outcomes of suggesting blockbusting?

- An illegal practice in which licensees or others encourage homeowners to sell because of an influx or expected influx of members of a protected class moving into the neighborhood - Suggesting this will result in decreased property value, increase in crime, decrease in school quality

What five cities in Texas have their own fair housing ordinances?

- Austin - Corpus Christi - Dallas - Fort Worth - Garland

If the Administrative Law Judge finds one guilty of discrimination, what may the guilty party be ordered to do?

- Compensate damages (including humiliation, pain, suffering) - Provide relief (i.e. make the housing available to complainant) - Pay civil penalty to federal government - Pay attorney fees

What are the broker's responsibilities to comply with fair housing laws?

- Follow suggestions of NAR - Prominently display equal opportunity poster - Maintain fair housing concept in advertising - Provide agent training - Report misconduct by agents - Put system in place to monitor activities of agents - Include fair housing policy in office manual

What guidelines do buildings with 4 more units or an elevator must follow in regards to the Fair Housing Amendments Act of 1988? What floors need to follow these guidelines if there is no elevator?

- Hallways/doorways wide enough for wheelchair - Accessible route into/through unit - Accessible light switches, outlets, thermostats, etc. - Reinforced bathroom walls to allow installation of grab bars - Accessible kitchens/bathrooms for those in wheel chairs - If there is no elevator in the building, only the ground floor needs to follow rules

What are the agent's responsibilities to comply with fair housing laws?

- Know laws and responsibilities - Act in accordance with law - Keep clear and accurate records - Attend fair housing training seminars - Know resources if conduct needs to be reported

What questions are prohibited to be asked under the Equal Credit Opportunity Act (ECOA)?

- Lender cannot ask applicant to reveal sex, race, national origin or religion - Lender cannot ask if applicant is widowed or divorced - Lender cannot ask about applicants plans for having or raising children - Lender cannot ask if applicant receives alimony or child support (but can ask if they pay them)

What must companies covered under the HMDA keep and what is it?

- Loan Application Register (LAR) - Every time a person applies for a home mortgage at an institution covered by HMDA, institution must make corresponding entry into register

Can a building or community discriminate against families or those of any age?

- No, they cannot discriminate against families with one or more child under 18 living with a parent, legal guardian or pregnant woman - Exemption: Housing for Older Persons Act for communities that are occupied solely be persons aged 62 and up or the intent to have those aged 55+.

How long does one who has been discriminated against have to file a complaint with the FHEO? How long after complaint is received does the FHEO have to reach decision?

- One has 1 year tot file complaint after alleged act - The FHEO starts an investigation after receiving a complain and within 100 days will reach a decision to charge or dismiss

Name an example of how the Community Reinvestment Act of 1977 can be put to use to promote the availability of credit and other banking services to communities that haven't received as much service as others.

- Opening new branches - Provide expanded services - Flexible credit standards

What is protects under the Americans with Disabilities Act of 1990?

- Persons with disabilities have equal access to jobs, public accommodations, government services, public transportation & telecommunications.

What does the Equal Credit Opportunity Act (ECOA) prohibit?

- Prohibits lenders from discriminating against applicants on the basis of race, color, religion, national origin, sex, marital status, age, and dependency on public assistance - Cannot discourage applicant from applying because of a protected status

What are the seven protected classes in Texas Fair Housing Laws?

- Race - Religion - Color - National Origin - Sex - Handicap - Familial Status

What language should be used in advertising to avoid issues with discrimination?

- Racially neutral language - Cannot indicate a preferred gender (unless seeking shared living/dorm accommodations) - Cannot state preference on ages or number of children, nor state preference for adults/couple/single

What are six examples of discrimination in mortgage lending based on protected classes?

- Refusing to allow a mortgage or provide loan information - Refusing to purchase a loan - Setting different conditions for a loan purchase - Giving different terms for loans (i.e. interest rates / fees) - Discriminating when doing property appraisal - Refusing to loan for certain geographical areas

What are six examples of housing discrimination?

- Refusing to sell, rent or negotiate with anyone who is in a protected class - Changing terms, conditions or services for different individuals as a means of discrimination - Stating/advertising that property is restricted - Telling people property is not for rent or sale when it is - Denying membership in any MLS - Using discriminatory advertising

What can businesses do to be compliant with the Americans Disabilities Act of 1990?

- Remove physical barriers that are readily achievable - Large businesses are expected to take more of an active role to make property compliant

What office can Texas Residents file complaints of discrimination and how long do they have to do it?

- Texas Workforce Commission Civil Rights Division - One year from date of incident to file complaint

What are the three things the Federal Reserve Board designed the Home Mortgage Disclose Act to do?

1) Help public officials distribute public-sector investments 2) Discover if financial institutions are neglecting the needs of the community 3) Identify where there are discriminatory lending practices

What are the two Texas statutes under Texas Fair Housing Laws

1) No form of discrimination can be upheld in a court of law 2) Agents cannot discriminate in their practice of real estate

What are the three requirements under the Fair Credit Reporting Act?

1. Keep all credit information confidential 2. Obtain authorization from a consumer in order to seek the customer's credit info 3. Reveal the sources of the credit information to the consumer

What are the five rules that an agent should make clear they follow when working with a seller?

1. Prospective buyer will only be described in terms that don't include protected status 2. Prospective buyers will not be identified by name but by occupation, present residence or other characteristics that wouldn't identify them as members of a protected class 3. Facts of the offer should be carefully documented so broker cannot be charged with failure to present offer in a fair manner 4. Listing will be terminated if seller refuses to consider an offer because a prospective buyer is a member of a protected class 5. Supervisor and broker will be informed of any suspected attempts by seller to illegally discriminate

What are the five things that testers look for?

1. What actions took place when they entered office? 2. How long did they wait to be interviewed after entering office? 3. Did anyone in the office do anything kind for the tester while they were waiting? 4. Where was the tester interviewed? 5. Did the agent request any information about their housing needs?

How many days do lenders have to provide the reason for credit denial?

30 days

What is discriminatory advertising?

Advertising that indicates a preference, limitation or discrimination based on race, color, religion, handicap, sex, familial status or national origin

What was allowed following Plessy vs Ferguson case of 1896?

Allowed separate but equal racially segregated accommodations and facilities

How frequently must the information from the financial institutions required to be disclosed under the Home Mortgage Disclosure Act?

Annually

What does the Civil Rights Act of 1866 prohibit?

Discrimination based on race

What does the Jones vs Mayer 1968 Supreme Court Case prohibit?

Discrimination based on race us strictly prohibited (no exemptions or exceptions)

What does the Civil Rights Act of 1964 prohibit?

Discrimination based on race, color, national origin in programs and activities receiving federal financial assistance

What does the Civil Rights Act of 1968 prohibit?

Discrimination based on race, color, religion, or national origin

What does the Federal Fair Housing Act Prohibit?

Discrimination in the sale or rental of property based on race, color, religion, national origin, sex, handicap and familial status

What protected classes did the Fair Housing Amendments Act of 1988 add?

Handicap and Familial Status

When are LARs submitted to the Federal Financial Institutions Examinations Council (interagency body that administers the HMDA) and how long do they need to be kept for?

LARs are submitted every March and must be retained for 3 years

What office enforces fair housing laws?

Office of Fair Housing and Equal Opportunity (FHEO)

What was the Community Reinvestment Act of 1977 passed to prevent?

Passed to prevent redlining and to encourage banks/landers to help meet credit needs of all in their communities

What was prohibited following Buchanan vs Warley case of 1917?

Prohibited blacks from living in neighborhoods where majority of homes are owned by whites

What was prohibited following Brown vs Board of Education case of 1954?

Prohibits racial segregation in public schools

What is required under the Home Mortgage Disclosure Act (HMDA) of 1975?

Requires financial institutions to maintain and disclose data about home purchases, pre-approvals, home improvement, and refinance applications involving one to four unit/multi-family dwellings

What is required of federal financial institution regulators under the Community Reinvestment Act of 1977?

Requires them to assess records of banks to help them fulfill obligations to community

What is redlining?

Restricting the number of loans in certain areas of a community because of its racial or ethnic makeup

What protected class did the Housing and Community Development Act of 1974 add?

Sex

What is rate spread?

The difference between the rate given at the time of application to one borrower and another borrower with similar financial qualification

What is steering?

The illegal practice of channeling homebuyers toward or away from homes in certain neighborhoods to preserve or alter the makeup of that neighborhood