HUD Takes Action Against Lender For Alleged Discrimination

Posted by Patrick Barnard on September 16, 2014 No Comments
Categories : Residential Mortgage

The U.S. Department of Housing and Urban Development (HUD) has taken enforcement action against U.S. Bank National Association, U.S. Bank subsidiary Red Sky Risk Services LLC (formerly known as USB Lending Support Services LLC), and one of U.S. Bank's loan officers for allegedly discriminating against a Native American couple.

HUD says the bank denied the Belcourt, N.D., couple a mortgage refinancing because their property is located on a reservation, which is a violation of the Fair Housing Act. The Act prohibits lenders from discriminating against mortgage applicants based on race, color, national origin, religion, sex, family status or disability.

In a complaint, the couple alleges that U.S. Bank, the bank's appraiser Red Sky Risk Services and one of the bank's loan officers discriminated against them when they attempted to refinance their home loan. They alleged that when U.S. Bank processed their loan application, they were told that the ‘value or type of collateral was not sufficient,’ and further, that because the property is located on a Native American reservation, the bank was not able to make the loan and Red Sky Risk Services was not able to appraise the property.

As part of the settlement, the bank will pay the couple's U.S. Bank credit card balance in the amount of $11,489.56 and approve their application for refinancing at the same interest rate and terms and conditions under which they originally applied.

‘A person's race and national origin have no effect on their credit worthiness,’ says Gustavo Velasquez, assistant secretary for fair housing and equal opportunity for HUD, in a statement. ‘HUD will continue to work to give all families an equal opportunity at homeownership by ensuring that lenders meet their obligation to comply with the Fair Housing Act.’

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