Posts Tagged ‘fair housing’

Judge rules against housing disparate impact theory

The Obama Administration has repeatedly dodged cases in fear of judicial review of its controversial application of the disparate impact theory to mortgage lending and other aspects of the housing market, but its position has now met with a stiff rebuke from district court judge Richard Leon [Insurance Journal]:

“This is yet another example of an administrative agency trying desperately to write into law that which Congress never intended to sanction,” Leon wrote.

He called the rule “nothing less than an artful misinterpretation of Congress’s intent that is, frankly, too clever by half.”

Banking and finance roundup

Dept. of unexpected findings, discrimination law division

“Study results in jurisdictions with state-level protections against housing discrimination on the basis of sexual orientation unexpectedly show slightly more adverse treatment of same-sex couples than results in jurisdictions without such protections.” [Samantha Friedman et al., “An Estimate of Housing Discrimination Against Same-Sex Couples,” SSRN]

Critics: unlawful for real estate websites to provide demographic data

A popular feature of many real estate websites is the ability to search for neighborhood- and town-level statistics on crime, rated school quality, income, age, concentration of school-age children, and a host of other demographic variables. Now the National Fair Housing Alliance, the busy group that has extracted tens of millions of dollars from other businesses through complaints and litigation, says it is considering complaints against sites that offer search for information related to forbidden fair housing categories (race, national origin, family structure, and others) and either offer real estate for sale or refer business to real estate agencies. Site operators object that the offending information typically comes from the U.S. Census Bureau itself and that consumers could still obtain such information online, if a bit less conveniently, even if real estate sites stopped offering it. [Kenneth Harney, Washington Post/syndicated]

House blocks funding for HUD local power grab

We’ve tracked (especially by way of the Westchester County, N.Y. controversy) the ambitious efforts of the federal Department of Housing and Urban Development to grab more control over local governments’ zoning and project building decisions, in part through a proposed new “AFFH” rule (Affirmatively Furthering Fair Housing). Now the House has voted an appropriations rider cutting off funds for implementation of the new rule. [sponsor Rep. Paul Gosar (R-Ariz.), Paul Mirengoff/PowerLine, Sara Rankin/Legislation Prof (opposed), National Low-Income Housing Coalition, earlier on AFFH and on housing discrimination law generally]

Maryland roundup

“We wouldn’t file a complaint against someone who doesn’t have liability”

A group called the National Fair Housing Alliance has taken the lead in levying sensational bias charges against mortgage lenders, claiming that neglect of REO (real-estate-owned) properties following foreclosure has followed racially discriminatory patterns. It helped negotiate the extraction of $42 million from Wells Fargo, and is pursuing tens of millions in claims against Bank of America and other lenders. NFHA’s claims have routinely been given unskeptical circulation in the press, but now an investigation by Kate Berry and Jeff Horwitz in the American Banker is bringing overdue scrutiny:

The group has disclosed addresses for only a fraction of the properties it alleges the banks have neglected, but a review of those it has released indicates that NFHA regularly misidentified the institution legally responsible for maintaining specific homes. In some cases, it conflated the banks responsible for maintaining properties with those that were simply serving as trustees for mortgage-bond investors. In others, it faulted banks for damage that occurred before they took possession of properties.

Not in dispute is the leverage the NFHA has gained in its dealings with banks from its close ties to supporters in the federal government. Unusual among Washington agencies, the Department of Housing and Urban Development both funds housing discrimination investigations by nonprofits, including by the NFHA, and provides the venue for them to negotiate their claims.

Grants from HUD and Fannie Mae helped get the NFHA and its leader, Shanna Smith, into the profitable business of investigations in the first place. Banks complain without success about Smith’s practice of demanding a deal while withholding the actual identities and addresses of the properties said to be suffering from bank neglect. Now the HUD-brokered Wells Fargo settlement has paid off richly with $30 million+ for the NFHA and its affiliates, the better with which to stir up more complaints. And watch the revolving door spin, amid few qualms arising from conflicts of interest: “Sara Pratt, the HUD official responsible for investigating and resolving the NFHA’s complaints, and who oversaw its settlement with Wells Fargo, is a former NFHA staffer and consultant.” (cross-posted at Cato at Liberty).

Mount Holly Gardens: ‘Til we moot again

It looks as if someone really doesn’t want the Obama administration’s treasured but shaky “housing disparate impact” theory to come under review by the Supreme Court [Josh Blackman on reports of settlement mooting Mount Holly, N.J. case granted certiorari and pending before the Court; earlier on controversial tactics used to moot St. Paul case through settlement]

More: Piscataway v. Taxman also dropped off the Court’s docket via a mootness tactic. And shorter Doug Kendall/Constitutional Accountability Center: how dare PLF, Cato and IJ take the Court’s word on what the issue is in Mt. Holly? [Ilya Shapiro]

Banking and finance roundup

  • “Dodd-Frank and The Regulatory Burden on Smaller Banks” [Todd Zywicki]
  • Side-stepping Morrison: way found for foreign-cubed claims to get into federal court? [D&O Diary]
  • “Alice in Wonderland Has Nothing on Section 518 of the New York General Business Law” [Eugene Volokh, swipe fees]
  • “Financial Reform in 12 Minutes” [John Cochrane]
  • Why the state-owned Bank of North Dakota isn’t a model for much of anything [Mark Calabria, New York Times “Room for Debate”]
  • Regulated lenders have many reasons to watch SCOTUS’s upcoming Mount Holly case on housing disparate impact [Kevin Funnell]
  • Cert petition: “Time to undo fraud-on-the-market presumption in securities class actions?” [Alison Frankel]

October 7 roundup

  • More regulation of online speech: what could go wrong? “‘Eraser’ law gives California teens the right to delete online posts” [ABA Journal, Eric Goldman, Scott Greenfield]
  • Gov. Brown signs bill to grant law licenses in California to illegal immigrants [Reuters]
  • “Court: website alleging police corruption shouldn’t have been shut down” [Ars Technica; Lafayette, Louisiana]
  • License to speak: Eugene Volokh and Cato Institute challenge licensing of DC tour guides;
  • Thanks to Keith Lee at Associates Mind for including us in list of recommended law sites;
  • St. Paul disparate-impact housing controversy: “How Mischievous Obama Administration Officials Scuttled An Important Supreme Court Case” [Trevor Burrus, see also]
  • Great circle of tax-funded life: public sector lobbying expenditures [Washington state via Tyler Cowen]