Which act prohibited discrimination in mortgage lending - tradeprofinances.com

Which act prohibited discrimination in mortgage lending

## The Fair Housing Act of 1968: Prohibiting Discrimination in Mortgage Lending

### Introduction

The Fair Housing Act of 1968 (FHA) is a landmark piece of civil rights legislation that prohibits discrimination in the sale, rental, and financing of housing based on race, color, religion, national origin, sex, familial status, and disability. The FHA has been instrumental in promoting fair housing practices and protecting the rights of all Americans to live in the homes of their choice.

### History of the Fair Housing Act

The FHA was enacted in response to the widespread discrimination in housing that African Americans and other minority groups faced in the mid-20th century. In many cities, housing markets were segregated, and minorities were often denied access to desirable neighborhoods and quality housing. This discrimination created a cycle of poverty and inequality that hindered the economic and social progress of minority communities.

The FHA was introduced in Congress in 1966 by Senator Walter Mondale (D-MN) and Representative Emanuel Celler (D-NY). The bill faced strong opposition from real estate industry groups and some lawmakers, but it was eventually passed with bipartisan support and signed into law by President Lyndon B. Johnson on April 11, 1968.

### Key Provisions of the Fair Housing Act

The FHA prohibits discrimination in the following areas of housing:

1. **Sale and Rental:** It is illegal to refuse to sell or rent a home to someone based on their protected characteristics.
2. **Mortgage Lending:** Lenders cannot discriminate in the approval or denial of mortgage loans based on protected characteristics.
3. **Advertising:** Housing advertisements cannot contain discriminatory language or imagery.
4. **Steering:** Real estate agents cannot steer homebuyers or tenants to or away from certain neighborhoods based on their protected characteristics.
5. **Redlining:** Lenders cannot refuse to lend in certain neighborhoods based on the racial or ethnic makeup of those neighborhoods.

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### Enforcement of the Fair Housing Act

The FHA is enforced by the Department of Housing and Urban Development (HUD). HUD investigates complaints of discrimination and can take action against those who violate the FHA, including:

1. **Lawsuits:** HUD can file lawsuits against individuals or institutions that discriminate in housing.
2. **Fines and Penalties:** HUD can impose fines and penalties on violators of the FHA.
3. **Conciliation Agreements:** HUD can negotiate agreements with violators to resolve complaints and prevent future discrimination.

### Impact of the Fair Housing Act

The FHA has had a significant impact on the housing market in the United States. It has helped to desegregate neighborhoods, increase access to affordable housing for minorities, and protect the rights of all Americans to live in the homes of their choice.

According to HUD, the FHA has:

1. Reduced racial segregation in housing by 75% since 1960.
2. Increased homeownership rates for minorities by 50% since 1960.
3. Increased the number of fair housing complaints filed with HUD by 100% since 1960.

### Challenges and Controversies

Despite its overall success, the FHA has faced some challenges and controversies over the years. These include:

1. **Enforcement:** Some critics argue that HUD does not do enough to enforce the FHA and that discrimination in housing still persists.
2. **Disparate Impact:** Some courts have ruled that the FHA does not prohibit the use of neutral policies that have a disparate impact on minorities, even if those policies are not intended to discriminate.
3. **Overreach:** Some critics argue that the FHA goes too far and infringes on the rights of property owners.

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### Conclusion

The Fair Housing Act of 1968 is a landmark piece of legislation that has helped to promote fair housing practices and protect the rights of all Americans to live in the homes of their choice. Despite some challenges, the FHA has helped to desegregate neighborhoods, increase access to affordable housing for minorities, and protect the rights of all Americans to live in the homes of their choice.