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HUD No. 98-146
Further Information:For Release
In the Washington, DC area: 202/708-068511 a.m. Friday
Or contact your local HUD officeApril 3, 1998


NOTE: Radio actuality of Secretary Cuomo available . Call 703-418-2060.

WASHINGTON - Commemorating the 30th anniversary of Dr. Martin Luther King Jr.'s assassination and the passage of the Fair Housing Act, Housing Secretary Andrew Cuomo today announced a record high $2.1 billion settlement of a mortgage lending discrimination case, a $325,000 settlement in an apartment segregation case, and new charges against four men involved in a cross-burning incident at a woman's home.

"On April 4, 1968, America suffered a terrible loss when Martin Luther King was killed by an assassin's bullet," Cuomo said. "But no bullet and no force could stop Dr. King's historic work. Just six days after his murder, Congress paid him tribute by passing the Fair Housing Act to outlaw housing discrimination."

"Today, we are here to honor Dr. King and to commit ourselves to working together with more effectiveness than ever before to enforce this important law and to end the illegal and intolerable outrage of housing discrimination," Cuomo said. "We must ensure that every American family can live in any home and in any neighborhood they can afford."

Cuomo announced:

  • The highest settlement of mortgage lending discrimination allegations in U.S. history - a conciliation agreement signed by AccuBanc Mortgage Corporation targeting $2.148 billion in mortgages to minorities and low- and moderate-income families in the next three years to enable them to become homeowners. Fair housing agencies expect that over 15,700 families will receive mortgages because of the agreement. AccuBanc - based in Dallas - makes mortgage loans in every state. The lender agreed to train its staff to deal with fair lending and diversity issues and to create programs to attract more minority and low- and moderate-income borrowers.

  • A $325,000 settlement of a housing discrimination lawsuit filed against the Riviera Oaks Apartments in New Orleans. The apartment owners were accused of segregating African American tenants in apartments on one side of the 140-unit complex, requiring them to use a separate swimming pool from whites, and denying them the same services provided to white tenants. Owners of the apartments have fired the on-site manager and are selling the apartments.

  • The filing of housing discrimination civil charges against four men involved in a cross-burning in Rushville, MO, at the home of a woman of Portuguese heritage who they believed was part of an African American family. Three of the men have already been convicted of criminal charges in federal court of conspiring to violate the rights of the woman and her three children. The fourth man admitted his role in the cross-burning and was granted immunity. The men were arrested after Nick Connor, a high school student who attended a meeting where angry neighbors urged an attack on the family, told authorities about the incident.

The Department of Housing and Urban Development began a stepped-up campaign against housing discrimination in September at President Clinton's direction, as part of the President's One America Initiative. Cuomo pledged to double the number of enforcement actions HUD takes against violations of the Fair Housing Act by the year 2000.

This past fiscal year, as a result of HUD's crackdown, HUD obtained $9.6 million in relief for individuals in housing discrimination settlements - compared with $4.4 million the year before.

"Our enforcement actions demonstrate that, unfortunately, discriminatory housing practices in America are widespread - not isolated occurrences," Cuomo said.

President Clinton's proposed 1999 federal budget seeks $22 million in increased funding for HUD to intensify the fight against housing discrimination. The 73 percent increase for HUD's Office of Fair Housing and Equal Opportunity would boost spending by the office to $52 million. It is the largest single budget increase in civil rights law enforcement in two decades.

Martin Luther King III, President of the Southern Christian Leadership Conference, said in a statement issued today and read at HUD's news conference that he supports the crackdown on housing discrimination as a continuation of his father's work. He said: "As we commemorate the anniversary of Martin Luther King Jr.'s death and pay homage to his legacy and his life-long struggle for equal rights for all humankind, I urge all Americans to carry forward his important work to end housing discrimination. The increased funding President Clinton and Secretary Cuomo are seeking to expand enforcement of this law is needed to enable America to do more than ever before to finally end this terrible and destructive form of prejudice." (Full statement)

Cuomo was joined at the news conference by: Acting Assistant Attorney General Bill Lann Lee; National Council of LaRaza President Raul Yzaguirre; National Council on Independent Living Executive Director Anne-Marie Hughey; and the discrimination victim in the Missouri cross-burning case, Liza Costa.

Yzaguirre said: "I applaud Secretary Cuomo and his staff for their recent accomplishments in the struggle to end unlawful housing discrimination. The need for enhanced enforcement has never been greater. Three decades after our nation outlawed discrimination in housing, Hispanic Americans in some markets face a virtual statistical certainty of encountering some form of discrimination in a typical housing search."

Hughey said: "We must have zero tolerance for housing discrimination of any kind. We must all continue to aggressively implement the Fair Housing Act and remove the physical and attitudinal barriers that force people with disabilities into segregated, substandard housing and institutions."

Here are more details of today's announcements by Cuomo:


The record-setting $2.148 billion settlement with AccuBanc resulted from two lending discrimination complaints against the lender filed in Texas with HUD by the Fort Worth Human Relations Commission and the City of Dallas.

Tests of the lender were conducted by whites and minorities posing as applicants for home mortgage loans. One test in Dallas showed that a minority tester was told he was eligible for an $85,000 loan, while a white tester with a less favorable financial record was told he was eligible for a loan of $110,000 to $150,000. In another test, a minority tester was told he was eligible for a $115,000 loan, while a white tester with a similar financial record was told he was eligible for a loan of up to $150,000. There were similar results in other tests.

In a statement he signed as part of the agreement with HUD, AccuBanc President and Chief Operating Officer James Munford wrote: "AccuBanc recognizes that the two complaints which were filed against it based on testing results showed treatment by AccuBanc employees towards African Americans and Hispanics which did not meet the standards that AccuBanc sets for itself - actions which may have violated the nation's fair housing laws.... AccuBanc has agreed in a settlement with the U.S. Department of Housing and Urban Development to sharply increase its lending to minorities and low- and moderate-income borrowers over the next three years and to work closely with HUD to better serve minorities nationwide. We were convinced that this agreement was the best way to move quickly to make the changes we knew we needed and had to make.... We support the goals and purpose of this agreement from a corporate standpoint, and because we believe it is the right thing to do."

"This agreement is a victory for everyone involved," Cuomo said. "More minority families will get the opportunity to become homeowners, and AccuBanc will do increased businesses. AccuBanc has set an example of good corporate citizenship."


The Greater New Orleans Fair Housing Action Center filed a housing discrimination complaint against the Riviera Oaks apartment complex in a case that grew to include ten African American tenants. Testing by the Fair Housing Action Center found that black and white tenants were each steered to different sides of the apartment complex. One side of the apartment complex was occupied entirely by black tenants (except for a white woman with bi-racial children and a white woman who lived with a black man).

In addition, each side of the complex had a swimming pool that could be used only by residents living on that side. As a result, the overwhelming majority of blacks were barred from using the pool frequented by whites - even when the pool on the "black side" of the complex was closed during the spring and summer of 1995 and 1996. Tenants on the "white side" could control heating and air-conditioning in their apartments, but on the "black side" temperatures could only be adjusted by management, the investigation found.

The owners of the complex, Favrot Realty Partnership, agreed to the $325,000 settlement to close the case. The owners fired on-site manager Linda Kreger after the housing discrimination lawsuit was filed against them and are in the process of selling the apartments.

Shawn Walton, a black woman who initiated the discrimination complaint, said: "This isn't the way things are supposed to be, slavery is over. This is 1998. We're free, we're not living in a cage. Everybody has equal opportunity."


Liza Costa, a mother of three of Portuguese descent, filed a housing discrimination complaint with HUD in September after finding a seven-foot high metal cross wrapped in fabric burning on the front lawn of her home in Rushville, MO. An investigation found that some neighbors believed members of the Costa family were black.

The investigation found that a group of neighborhood residents met before the cross burning at a local fire station and expressed anger that a black family had moved in and discussed burning a cross on Costa's lawn. Five high school students at the gathering refused to be included because they believed it was wrong. Despite threats and ridicule they walked away. Later, one of the teen-agers - Nick Connor - told authorities about the cross burning.

Connor said he was surprised such an incident could take place. "It did help me realize that our fight against racism isn't over, people need to be more educated," he said. "Racism is just ignorance."

Dennis Pospisil, his brother Barney Pospisil and Ted Fenton were also convicted of felonies in connection with the attack. They are currently in jail awaiting sentencing. Devin Peck admitted taking part in the incident but received immunity in the criminal case in return for cooperating with authorities.

The HUD action announced today seeks to collect damages from all four of the men under the Fair Housing Act. HUD action on the case was halted until the criminal case was resolved.

"I just don't understand what these men were thinking," Costa said. "I don't understand what gave them the right to be the 'welcoming committee' and decide who's good enough to live in this town - they're the ones who are burning crosses and committing crimes."


Cuomo announced last month that HUD will investigate the problem of mortgage lending discrimination in America's cities, in a move to increase urban and minority homeownership. The announcement followed what was - until today's announcement - the highest settlement on record of mortgage discrimination allegations under the Fair Housing Act. HUD helped negotiate the settlement with three lenders, who agreed to make nearly $1.4 billion in home mortgage loans and to increase homeownership by low- and moderate-income families and minorities over the next three years. The largest lender in the group is Temple-Inland Mortgage Corp.

According to the Census Bureau, in 1997 the nation's homeownership rate hit a record high of 65.7 percent. However, while the homeownership rate was 72.5 percent in suburbs last year, it was only 49.9 percent in cities, where low- and moderate-income residents and minorities are disproportionately concentrated. The homeownership rate last year was 72 percent among whites, but only 45.4 percent among African Americans and just 43.3 percent among Hispanics.

A U.S. Conference of Mayors report issued last month said statistics collected by the Federal Reserve Board show that "minority households applying for mortgage credit were much more likely to be rejected than white households with similar income."

When it was enacted in 1968, the Fair Housing Act barred housing discrimination on account of race, color, religion, and national origin. The Act was amended in 1974 to outlaw discrimination based on sex and in 1988 to bar discrimination against families with children and against people with disabilities. The Act covers the sale, rental, financing and advertising of almost all housing in the nation. Fair housing investigations are conducted by HUD investigators, state and city agencies working with HUD, and private fair housing groups that receive HUD funds.

A finding by an administrative law judge that the Fair Housing Act has been violated carries a top penalty of $11,000 in civil penalties for a first offense and $55,000 for later offenses. Additional penalties include: monetary compensation to victims for actual damages, humiliation, mental distress, and loss of their fair housing rights; attorney fees; and court costs. A finding by a federal court of a violation may include punitive damages, as well as compensation for victims.

People who believe they have been harmed by housing discrimination can file complaints with HUD by calling 1-800-669-9777.

Content Archived: January 20, 2009

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