On November 16, 2011, the Department of Housing and Urban Development (HUD) issued a proposal, entitled Implementation of the Fair Housing Act's Discriminatory Effects Standard. Comments from the public are due by January 17, 2012.
This announcement is much more involved than it seems, for HUD, to which Congress gave the authority and responsibility for administering the Fair Housing Act and the power to make rules implementing the Act. In HUD's proposal, a demonstration that a housing practice is supported by a legally sufficient justification may not be used as a defense against a claim of intentional discrimination.
The question of "disparate impact" (euphemistically linked to the "effects test") has deep roots in previous and on-going litigation, rising now to judicial review before the United States Supreme Court.
So, what's at stake? Let's take a closer look.
LENDERS COMPLIANCE GROUP is the first and only full service, mortgage risk management firm in the country that specializes exclusively in residential mortgage compliance. The firm provides risk management outsourcing to the mortgage industry, offering a full suite of hands-on and automated services in residential mortgage banking.
Jonathan Foxx is the President and Managing Director of Lenders Compliance Group.
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