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PRESIDENT CLINTON AND VICE PRESIDENT GORE ANNOUNCE LARGEST LENDING DISCRIMINATION SETTLEMENT IN AMERICAN HISTORY AT MARTIN LUTHER KING DAY SERVICE PROJECT
Today, President Clinton and Vice President Gore announced the largest lending discrimination settlement in American history -- $6.5 billion in mortgages and special programs designed to help 78,000 minority and low- to moderate-income families become homeowners.
The Department of Housing and Urban Development negotiated the record settlement with Columbia National Inc., based in Columbia, MD. The mortgage lender, which operates in 28 states, was accused of violating the Fair Housing Act by discriminating against minorities seeking home mortgages. Under the settlement, Columbia agreed to make $6 billion in home mortgage loans to minorities and low- to moderate-income families over the next five years.
The lender also agreed to spend $529 million over the five years on the following programs: $489 million in closing cost assistance programs and bond programs that subsidize interest rates for minority families and low- to moderate-income families; $36.5 million in home rehabilitation loans that will be available through HUD's Federal Housing Administration (FHA) 203k program; $2.6 million to advertise the availability of its home mortgages in minority oriented media; and $1 million to train its staff to deal with fair lending and diversity issues.
The settlement closes HUD's investigation of the lending discrimination charges, which grew out of a November 1997 complaint against Columbia by the Fort Worth Human Relations Commission. It is the eighth and final settlement involving testing done by the commission with a $100,000 grant awarded by HUD to determine whether there was racial discrimination in lending in the Fort Worth, Texas area.
The eight settlements, including Columbia, total $10.1 billion. Previous record-high lending discrimination settlements were negotiated by HUD in 1998 growing out of the same $100,000 grant. Those record settlements were for $2.1 billion from AccuBanc Mortgage of Dallas, Texas and $1.3 billion from Temple-Inland Mortgage of Austin, Texas, with most of the funds going for mortgages targeted to minorities and low- to moderate-income home buyers.
Congress passed the Fair Housing Act in 1968, six days after the assassination of Dr. Martin Luther King, Jr., who spent years working for passage of the measure to outlaw housing discrimination. Many of those voting for the measure at the time said it was a tribute to Dr. King.
The President and Vice President made the announcement at Regency House senior health center, where they worked with 15 AmeriCorps volunteers to tear down a wall. This project marks the beginning of full scale rehabilitation of the senior health center by AmeriCorps members. Regency House is a 160-unit high-rise apartment building for low-income seniors, administered by the D.C. Housing Authority. This year, more than 700 AmeriCorps members will serve with more than 8 projects across the District of Columbia.
Content Archived: January 20, 2009