dg conciliation agreements

8/2/2019 DG Conciliation Agreements

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UNITED STATES DEPARTMENT OF HOUSINC AI{D URBAN DEVELOPMENTTITLE VIIICOI.JCILIAT ION AGREEfu{ENT

Betweenl)eborah Gardner(Complainant)

AndWashington Mutual Bank(Respondent)Approved by the FHEO Regional Director on behalf of the United States Depafiment of Housing

arrd Urban DevelopmentFHEO CASE NUMBER: 04-07-0192-8A. PARTIES AND SUB.IECT PROPERTY. ComplainantDeborahGardner(hereinafter:"complainant"). JPMorgan Chase Bank, N.A., as acquirer of cerlain assets and liabilities of WashingtonMutual Bank fiom the Federal Deposit Insurance Corporation acting as receil'er (the nameddelendant here is " \\iashington Mutual Bank"), its related arrd alfiliated entities, companies,subsidiades, investors. insurers. partnerships, trusts, tnlstees, benef-iciaries. officers. directors.attomeys, agents, emplol,ees, representatives. predecessors and successors in interest, assigns,acquirers. successors in interest and all persons {natural or corporate ) affiliated r.vitl'r cr in privitl,rvith tirem or any olthem (hereinafter: "Respondent"). The subject prope,-ty is located at 12Q{} SW 6-5th Avenue. Plantations, FL 333 17. B.STATEil,{ETJT OF FACTS


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A conrplaint u'as flled on November I 5, 2A06, and amended on March 27 ,20A7 n,ith the UnitedStates Department of Housing and Urban Developrnent (the Depaftment) alleging thatComplainant rvas injured by a discriminatory act of Responderrt. Conrplainant alleges thatRespondent, violated s\805 of the Fair Housing Act as amended in 1988,42 U.S.C. 3601 et seq.(the Act). on the basis of disability by reftrsing to provide financing in a real estate transaction ontlre basis of race.

Respondent denies having discrinrinated against Complainant, but agrees to settle the clains inthe underlying action by entering into this Conciliation Agreenrent. The Agreernent does notconstitute an adrnission by Respondent of a violation of any statute or regulation.

C. TERM OF AGREEMENT

l. This Conciliation Agreement (hereinafter "Agreement") shall govem the conduct of the parliesto it for a period of one year fronr the effective date of the Agreement.

D. EFFECTIVE DATE

2. The parties expressly agree that this Agreernent constitutes neither a binding contract understatc or lederal law nor a Conciliation Agreement pursuant to the Act, unless and until sr.rch timeas it is approved by the U.S. Department of Housing and Urban Development, through the FHEORegional Director or his or lrer designee.

3. This Agreement shall become effective on the date on rvhich it is approved by the Director.Fair Housing and Equal Opportunity (FHEO) Region I of the United States Deparrment ofHousing and Urban Development (HUD).

E. GENERAL PROVISIO}{S4. The parties acknorvlcdge that this Agreement is a voluntary and full setrlenlelit of the disputeclcornplaint. The parties alfiim that they have read and lully understand the terms ser fofih herein.No party has been coerced. intimiclated, threatened or in any x.a,v forced to become a par1!'to thisAgreement.


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5. The Respondent acknou,ledges that it has an affirmative duty not to discrirninate under theAct. and that it is unlarvful to retaliate against arly person because that person has made acomplaint, testified, assisted or participated in any manner in a proceeding under the Act.Respondent further acknorvledges that any subsequent retaliation or discrimination constitutesboth a material breach of this Agreement. and a statutory violation cf the Act.

6. This Agreement, after it has been approved by the FHEO Regional Director, is binding uponRespondent, its employees, heirs, successors and assigns and all others in active concert with it.

7. lt is understood that, pursuant to Section 81O(bX ) of the Act, upon approvalof thisAgreement by the FHEO Regional Director, it is a public document.

8. This Agreement does not in any way limit or restrict the Department's authority to investigateany other complaint involving Respondent made pursuant to the Fair Housing Act, or any othercomplaint within the Departrnent's jurisdiction.

9. No amendnrent to, modification oi or rvaiver of any provisions of this Agreement shall beeflective unless: (a) all signatories or their successors to the Agreement agree in writing to theamendment, modification or waiver; (b) the amendment, rnodification or waiver is in writing;and (c) the arnendment, modification or rryaiver is approved and sigrred by the FHEO RegionalDirector.

10. The parties agree that the execution of this Agreement may be accornplished byseparate execution of consents to this Agreement, and that the original executed signature pagesattached to the body of the Agreement constitute one docuntent.

I l. Complainant hereby forever rvaives, releases, and covenants not to sue the Departrlent orRespondent, its heirs, execLltors, assigns, agents, employ'ees and attorneys ',r,ith regard to any andall claims. danrages and injuries of whatever nature. rvhether presentl)' knorvn or unknolvn.arising out of the subjecl matter of HUD Case Number 01-07-01 92-8, or which could have beenfiled in an-v action or suit arising lrom said subject matter.

12. Respondent hereby lorever waives, releases, and covenants not to sue the Depafinrent orConrplainant and its successors. assigns, agents. officers, troard nrembers. emplovees and


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attonlevs rvitlr regard to inry and all claims, dama,ees and injuries of u'hatever nature 'ir'hetherpl'esently known or unknorvrr. arising out of the subject ntatter of IIUD Casc Nutnber 01-07{1192-8 or u,}rich could have been filed in any action or suit arising lrom said subject matter.

F. RET-IEF FOR COI\,IPLAINANT13. To avoid any future costs and e.{penses and as a goodrvill gesture to Complainant, theRespondent agrees to pay the Conrplainant Seven Thor"rsand Dollars (57,000.00) in exchange lbrthe disnrissal of this conrplaint. Tlre money rvill lre paid u'ithin forirteen (14) dai:s of the si-slningof tlic- ConciIiation Agreentent.C. TUITTIIER AC'|IONS:14. ln additiorr to Cornplainants'release contained above, Conrplainant lrereby withdrarvs, i.r,ithprejudice, the Federal Discrimination Conrplaint filed r.vith lhc Depanment against Respondent,its related and alfiliated entities, conrpanies, subsidiaries, investors, insurers, partnerships, trusts,tmstees, beneficiaries, of{icers. directors, attomeys, agents, ernployees, representatives,predeccssors and successors in interest. assigns, and all persons (natural or corporate) alfiliatedrvith or ir"r privity n,ith them or any of them including. but not lirnited to. Washington MutualBank and JP Morgan/Chase.

15. In exchange lor tlie Respondent's trrerformance of the provisions of this Agreement, theConrplainant hcreby rvair.es, releases and covenants not to file any civil or other action againstthe Respondent, or to undeftake further administrative action against the Respondent, rvithrespect to the matters rvhich were or rvhich rnight have been alleged in the subject fair hor-rsingconrplair-rt arrd rvith respect to all claims or causes of action of any kind r,r'hatsoever thatCornplainant has or might have dircctly or indirectly attrilrutablc to any act or omission byRespondent in relation to the origination of Conrplainant's resitlential ntoftgage loan. This releaseand rvaiver applies to the cornplaint existing betrveen the signatories to this Agreernent, andapplics to any other contirlaints filecl bv Cor"nplainants rvhiclr nray be pending *'ith theDepartment, including all matters pending up to the effective datc of this Agrec-r.nent.Additionallv. thc Dcpaftmettt agrees not to take art1.' furthc'r action rvith respect to the complaintor an)'other complaints filed by thc Corrrplainant n'lrich rnay be pending rvith the Deparlment.This relcasc docs not alfect any,trrafiies n'ho are not signatories to this Agreement.

II. REI-IEF IN I'iIE PL BLIC I\TF.REST

16. It is R.esportdent's polic,v io nrake allcrctlit protlucts available to all current and lirturc:custonrers riithout discrinrinating clr the basis of prohibitecl ch:rracteristics including race. color.religion, sex. s!-rual orientation. ntarital or lanrilial status. a-ue. nittional origin. handicap. reccipt


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ol'public assistance, age or location of dwelling, or good failh exercise of rights under theFederal Credit Protection Act. Respondent routinely motritors its performance under theapplicable laws and regulations that are commonly referred to as Fair Lending Laws, and takescorective action rvhen indicated bv such review.

17. Respondent rvill send a communication to its personnel involved in processing and sen'icingof loans to review its Fair Lending Policy, or provide Fair Lending Training. The Respondentagrees to track the employees that have reviewed the policy or have taken the training. It isunderstood that heritage Washington Mutual Bank employees may have alreatly taken the lairlending training referred to in this paragraph after.lPMorgan Chase's acquisition of certain assetsand liabilities of Washington Mutual Bank from the Federal Deposit Insurance Corporationacting as receiver and are not required to retake this training) except as required in the ordinarycourse of business by Respondent. For any heritage Washington Mutual Bank employeesinvolved in the processing and servicing of loans that have not received Fair Lending trainingsince the acquisitior-r, Respondent will provide Fair Lending training within trvelve months of theeffec{ive date of this agreement.

MONITORING

19. The Department shall determine compliance with the terms of this Agreement. During thetenn of this Agreement, HUD may review compliance with this Agreement. As part of sr.rchreview, HUD may inspect Respondent's property identified in Section A of this Agreement,examine witnesses and copy pertinent records of Respondent. Respondent agrees to provide itsfull cooperation in any nronitoring revierv undertaken by HUD to ensure compliance with thisAgreement.

J. CONSEQUENCES OF BREACH

20. Whencver the Depanment has reasonable cause to believe that Respondent has breached thisAgreement, the nratter ma-v be referred to the Attornev General of the United States, tccommence a civil action in the appropriate U. S. District Court. pursuant to {S 810(c} and8l-t{bX2) of the Act.

K. SIGNATURESDeborah Cardner


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Thomas E. ReardonAssistant Vice President For JPMorgan Chase Bank, N.A., as acquirer of certain assets andliabilities of Washington Mutual Bank from the Federal Deposit Insurance Corporation acting asreceiver (the named defendant here is "Washington Mutual Bank") {Respondent)

L. APPROVALMarcella O Brown, Region I DirectorOffice of Fair Housing and Equal Opporlunity


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D. EFFECTWE DATE2. The parties expressly agree that this Agreement constitutes neither a binding contract under state orfederal law nor a Conciliation Agreement pursuant to the Act, unless and until such time as it is approvedby the U.S. Department of Housing and Urban Development, through the FFIEO Regional Director, or hisor her designee.3. This Agreement shall become effective on the date on which it is approved by the Director, Fair Housingand Equal Opportunity fmo) Region IV in Atlanta, Georgia of the United States Department of Housingand Urban Development (HttD).E. GENERALPROVISIONS

4. The parties acknowledge that this Agreement is a voluntary and full settlement of the disputedcomplaint. The parties affirm that they have read and fully understand the terms set forth herein. No parfyhas been coerced, intimidated, threatened, or in any way forced to become a parfy to this Agreement.5. The Respondent acknowledges that he or she has an afErmative duty not to discriminate under the Act,and that it is unlawful to retaliate against any person because that person has made a complaint, testified,assisted, or participated in any manner in a proceeding under the Act. Respondent further acknowledgesthat any subsequent retaliation or discrimination constitutes both a material breach of this Agreement, and astatutory violation ofthe Act.6. This Agreement, after it has been approved by the FFIEO Regional Director, or his or her designee, isbinding upon Vanderbilt Mortgage Company, its employees, heirs, successors and assigrs and all others inactive concert with the lending institution in the ownership or operation of Vanderbilt Mortgage Company,located in Maryville, Tennessee.7. It is understood that, pursuant to Section 8l0OX4) of the Act, upon approval of this Agreement by theFFIEO Regional Director, or his or her designee, it is a public document.8. This Agreement does not in any way limit or restricts the Department's authority to investigate any othercomplaints involving Respondent made pursuant to the Fair Housing Act, or any other complaints withinthe Department' s jurisdiction.9. No amendment to, modification of or waiver of any provisions of this Agreement shall be effectiveunless: (a) all signatories or their successors to the Agreement agree in writing to the amendment,modification or waiver; (b) the amendment, modification or waiver is in writing; and (c) the amendment,modification, or waiver is approved and signed by the FFIEO Regional Director.10. The parties agree that the execution of this Agreement may be accomplished by separate execution ofconsents to this Agreement, the original executed signature pages to be attached to the body oftheAgreement to constitute one document.I l. Stacey Ellis, Complainant, hereby forever waives, releases, and covenants not to sue the Department orVanderbilt Mortgage Company of Maryville, Tennessee, its heirs, executors, assigns, agents, employeesand attomeys with regard to any and all claims, damages and injwies of whatever nature whether presentlyknown or unknown, arising out of the subject matter of HUD Case Number 04-09-0534-8 or which couldhave been filed in any action or suit arising from said subject matter.12. Tlrre Vanderbilt Mortgage Company of the City of Maryville, Tennessee hereby forever waives,releases, and covenants not to sue the Department or Stacey Ellis, Complainant and its successors, assigns,


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agents, officers, board members, employees and attomeys with regard to any and all claims, damages andinjuries of whatever nature whether presently known or unknown, arising out of the subject matter of HUDCase Number 04-09-0534-8 or which could have been filed in any action or suit arising from said subjectmatter.F. RELIEF FOR COMPLAINANT13. The Vanderbilt Mortgage Company of the City of Maryville, Tennessee agrees to take the followingactions, and, as set forth in this Agreement, will provide the Department with written cerlification that theserequirements have besn met:

a. The Vanderbilt Mortgage Company agrees to pay the ctrrent value of the Complainant'shome. This value of the home is now appraised at $30,000 (land not included). A certifiedcheck in the amount of $30,000 will be sent to Pat W. Green at 1835 Assembly Street inColumbia, South Carolina2%Al in the name of Stacey Ellis, the Complainant together with asigned copy ofthe conciliation agreement.G. RELIEF IN THE PUBLIC INTEREST14. Within thitty (30) days ofthe effective date of this Agreement, Respondent shall inform all of its agentsand employees responsible for compliance with this Agreement, including any offtcers and board members,of the terms of this Agreement.H. MONITORING15. The Department shall determine compliance with the terms of this Agreement. During the term of thisAgreement, HUD may review compliance with this Agreement. As part of such review, HUD may inspectRespondent's property identified in Section A ofthis Agreement, examine witnesses, and copy pertinentrecords of Respondent. Respondent agrees to provide their full cooperation in any monitoring reviewundertaken by HLID to ensure compliance with this Agreement.I. REPORTING AND RECORDKEEPING16. Within forty-five (45) days ofthe effective date of this Agreement, Respondent shall certify to theFTIEO Regional Director, in writing, that it has complied with paragraphs 13 and 14 of this Agreement.17. Nl required certifications and documentation of compliance must be submitted to:

Mr. James N. SuttonRegional DirectorOffice of Fair Housing and Equal Opportunity40 Marietta SkeetAtlanta, Georgia 30303-2806

CONSEQUENCES OF BREACH18. Whenever the Department has reasonable cause to believe that the Respondent has breached thisAgreement, the matter may be referred to the Attomey General of the United States, to commence a civilaction in the appropriate U. S. District Coud, pursuant to $$ 810(c) and 81a$)(2) of the Act.


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SIGNATURES

Stacey Ellis, Complainant Date

DateWally Tyser, RespondentVanderbilt Mortgage Company

J. APPROVALJames N. SuttonFHEO Region [V Director Date Date


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WHEREAS, the Complainant alleges that the Respondent has violated Section804(b) and Section 805 of the Act, based on race and national origin;WHEREAS, the Respondent is in the business of originating residential

mortgages secured by single-family residences primarily through mortgage loan brokers;WHEREAS, the Respondent sells or securitizes the loans it originates to investorsin the secondary market;WHEREAS, Complainant NCRC alleges that Respondent SouthStar has engagedin a pattern and practice of discrimination against African Americans and Latinos in thepolicies and practices it uses to determine eligibility for some of its mortgage loanproducts by prohibiting loans on row homes in Baltimore and/or row homes valued at

less than $100,000.00 nationally;WHEREAS, the specific relief provided herein for the Complainant meets theirdemands for relief, and the Department has determined that the other relief detailedherein is sufficient to vindicate the public interest; andWHEREAS, Respondent's underwriting criteria is based upon and dependentupon its investors' underwriting criteria; andWHEREAS, Respondent, in entering into this Conciliation Agreement, denies anydiscriminatory conduct toward Complainant or the communities Complainant serves; andWHEREAS, Respondent is committed to providing equal lending opportunities

by following fair lending practices and by increasing home ownership opportunities, andseeks to be an industry leader in responsible lending practices; andWHEREAS, Respondent desires to avoid further expense in defending thisComplaint;THEREFORE, Complainant and Respondent agree to enter into this ConciliationAgreement to resolve this dispute without an evidentiary hearing.

I. GENERAL REMEDIAL PROVISIONSRespondent agrees that it, together with its officers and employees, shallnot violate any of the provisions of the Act, or any applicable state or localfair housing laws, in future real estate transactions covered by these laws.The parties acknowledge that this Conciliation Agreement is a voluntaryand full settlement of the Complaint. No party has been coerced,intimidated, threatened, or in any way forced to become a party to this

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C.

Conciliation Agreement. The parties have read and fully understand thesignificance of the terms set forth herein.This Conciliation Agreement shall become effective on the date it issigned by the Director, of the Office of Fair Housing and EqualOpportunity, Philadelphia Region III (the "effective date") and shallremain in effect for a period of four (4) years from its effective date.Pursuant to Section 810(bX4) of the Act, this Conciliation Agreement is apublic document.The parties agree that, in the interest of speedily concluding this matter,the Conciliation Agreement may be executed by the parties' signatures onseparate pages. The separately signed pages shall be attached to the bodyof the Conciliation Agreement to constitute one document.Respondent agrees to designate an employee to receive complaints fromconsumers, real estate agents, and mortgage brokers. This person willreport directly to a member of Respondent's upper management, to ensurethat management is aware of problems as they occur, and shall havesufficient authority to resolve problems quickly and equitably.Respondent has instituted a "second review" procedure for all denied loanapplications. The second review shall be carried out by the Credit fuskManager or a senior underwriter who has received training inRespondent's underwriting procedures and fair housing (as describedbelow). The second review official shall ensure that all mortgage loanapplications are being reviewed in a consistent manner without anydiscrimination on a prohibited basis. The second review official shall beempowered to overturn any underwriting decision if in the judgment ofthis official, an error was made. A log of files reviewed and actions takenwill be maintained by the Respondent for the duration of this Agreement.

Respondent agrees that if it advertises its loan products to consumers, then theadvertising shall be accomplished through media that serves the generalpublic, as well as media that serves the African-American, and Latinocommunities. All advertising will comply with the Act and convey themessage that customers a.re welcome to apply and have their applicationprocessed without regard to their race, color, religion, sex, national origin,handicap, or familial status.

Respondent agrees that it will not use the properly type of row home as anunderwriting criterion to exclude borrowers for any of its loan products.Respondent agrees that it will underwrite loans secured by row homesusing the same underwriting criteria for loans secured by condominiumsand townhomes.

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Respondent may use minimum property value as one of manyunderwriting criteria to determine the eligibility of an applicant for a loan,but may not use minimum properly value as an absolute bar to the makingof any loan. To the extent Respondent uses minimum property value asone of many underwriting criteia, it will ensure that it applies all of thecriteria in compliance with the Act.Respondent agrees that it will notiff the mortgage loan brokers andsecondary market investors with whom it conducts business that it hasdiscontinued its prohibition against lending on row homes under$100,000.00 in value and row homes in Baltimore.

II. EMPLOYEE TRAINING

C.

CURRENT EMPLOYEES: Within 180 days after the date of thisAgteement, all of the Respondent's officers, and employees engaged insoliciting, processing, underwriting, reviewing, or approving loans shallcomplete a training course that includes the following elements:1. The Respondent's responsibilities under this Agreement;2. The purpose of and prohibitions contained in the Act as it relates tomortgage lending;3. The Respondent's anti-discrimination policy; and4. The Respondent's disciplinary policy pertaining to violations ofthe Act by employees.NEW EMPLOYEES: Commencing ninety (90) days after the date of thisAgreement and thereafter for the duration of this Agreement, theRespondent's new employees hired to solicit, process, underwrite, review,or approve loans shall complete the training course described in the aboveparagraph within thirty (30) days of employment.TRAINING FREQUENCY: The Respondent's officers and employeesshall complete the same training approximately one year after the initialtraining is delivered, and againtwo years after the initial training isdelivered.TRAINING FORM: Each person who is required to complete a trainingcourse under this section of this Agreement shall execute a form, whichshall be maintained by the Respondent, acknowledging:

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l. Completion of the training course, and2. That they have received, read, and understand the Respondent'spolicies regarding discrimination, including the Respondent' sdisciplinary policy regarding violations of the Act.

III. RECORD-KEEPING AIID REPORTING REQUIREMENTSA. During the term of this Agreement, Respondent shall retain all mortgageloan application files that were submitted (regardless of Respondent'sfinal determination on the application) and all documents and noticesrelevant to such underwriting decisions and all records of the secondreview official. Respondent will also maintain copies of all advertising

done pursuant to Section I.I. above.IV. SPECIFIC RELIEF FOR THE COMPLAINANT AND COMPLAINANT'S

RELEASE

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Respondent shall pay Complainant a total of five hundred thousand($500,000.00) dollars. On September 15, 2006, Respondent will provideto the Complainant's attorney, Relman & Associates ("Complainant'sAttorney"), a check in the amount of one hundred twenty-five thousand($125,000.00) dollars made payable to the Complainant's Attorney. OnJanuary 8,2007,2008, 2009, and 2010, Respondent will provide to theComplainant's Attorney a check in the amount of ninety three thousandseven hundred frfty ($93,750.00) dollars made payable to Complainant'sAttorney. A copy of all checks will be provided to the Director of theOffice of Fair Housing And Equal Opportunity, 100 Penn Square East,Philadelphia, PA 19107.On January 8,2007,2008, 2009, and20l0 the Respondent will provideComplainant's Attorney with a copy of its underwriting guidelines so thatComplainant can ensure that Respondent is in compliance with thisConciliation Agreement. All documents provided shall be held in strictconfidence and may not be disseminated to third parties. The parties willcomply with Section V(A) below in resolving any differences regardinginterpretation and compliance with this Conciliation Agreement.In exchange for the Respondent's compliance with the provisions of thisConciliation Agreement, the Complainant hereby waives, releases,acquits, discharges, and covenants not to sue the Respondent, or pursueany administrative action against the Respondent in any forum, withrespect to any matters that were alleged in, were within the scope of theallegations, or could have been alleged in this Complaint against thisRespondent. In exchange for Complainant's agreement to resolve itsclaims by executing this Conciliation Agreement, the Respondent hereby

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waives, releases, acquits, discharges, and covenants not to sue theComplainant, or pursue any administrative action against the Complainantin any forum, with respect to any matters related to the allegations in theComplaint.Respondent agrees and understands that pursuant to a situation, whichreasonably so warrants, during the term of this Conciliation Agreement asdefined under Section I.C., the Secretary (the Secretary) of HUD onrequest of Complainant or on his own motion, may review compliancewith this Conciliation Agreement. As apart of such review, the Secretarymay require written reports concerning compliance, may inspect thepremises, examine witnesses, and examine and copy pertinent records ofthe Respondent at any reasonable time given reasonable notice by theDepartment to the Respondent.For the purpose of this Conciliation Agreement, the Secretary shalldetermine whether the Respondent has complied with the terms of thisConciliation Agreement. Whenever the Secretary has reasonable cause tobelieve that the Respondent has breached the Conciliation Agreement, theSecretary may refer the matter to the Attorney General for appropriateaction pursuant to 42 U.S.C. Section 814(bX2).

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V. OTHER PROYISIONSA. The parties to this Conciliation Agreement will endeavor in good faith toresolve informally any differences regarding interpretation and

compliance with this Conciliation Agreement. As stated in Section IV.D.,the Secretary shall determine whether the Respondent has complied withthe terms of this Conciliation Agreement. In the event that the parties andHUD are unsuccessful at resolving any disputes regarding interpretationand compliance, the Conciliation Agreement may be enforced pursuant tothe provisions of 42 U.S.C. Section 3610(c).The terms of this Agreement will bind any assignee or successor ininterest of the Complainant and the Respondent. The parties assume thatany assignee or successor in interest to Respondent will voluntarilyimplement the provisions of this Agreement, but if any such assignee orsuccessor in interest declines to implement voluntarily the provisions ofthis Agreement, it shall present to the Department its proposed plan ofoperation. If the Department concludes that the proposed plan will hinderthe attainment of the goals of this Agreement, it shall present suchconcems to the successor in interest and attempt to resolve the differencesvoluntarily. Any differences that cannot be resolved by the parties may bepresented to the HUD's Offrces of the Administrative Law Judges forresolution.

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SIGNATURE PAGECase Number: 03-06-0378-8

John Taylor, President and CEOFor National Community Reinvestment CoalitionComplainantDate


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Kirk Smith, PresidentFor SouthStar Funding, LLCRespondentDate


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APPROVED ON BEI{ALF OF TI{E SECRETARY:

Wanda S. Nieves, DirectorRegion III, Office of Fair Housingand Equal Opportunity

Date


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CONCILIATION AGREEMENTBetween

The United States Department of Housing and Urban Developmentand

National Community Reinvestment Coalition727 lsth Street, Suite 900Washington, DC 20005Complainant

andFirst Indiana Bank, National Association

135 North Perursylvania StreetIndianapolis,In 46204Respondent

HUD Case Number: 05-07-0583-8John Taylor, President & CEO of the National Community ReinvestmentCoalition (Complainant), filed an administrative complaint under the Fair HousingAmendments Act of 1988 (hereinafter known as the "Act') on December 14tr, 2006 with

the Departrnent of Housing and Urban Development (hereinafter known as the"Deparftnent" or "Fil.ID") against First Indiana Bank, National Association (hereinafter"First Indiana or "Respondent"). HUD accepted jurisdiction of this matter on March 2nd,2007. Complainant, Respondent and HUD hereby voluntarily enter into this ConciliationAgreement (hereinafter known as "Agreemenf'), as follows:

WHEREAS, the Complainant is a non-profrtorgantzanon that has the mission ofincreasing fair and equal access to credit capital, and banking services and product;

WHEREAS, the Complainant has launched aNational Civil Rights Best Practicescampaign for corporations, with a special focus on lenders, insurerso loan servicers, realestate and valuation professionals, and securitizers who are supportive of Complainant'smission;


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WHEREAS, the Complainant has filed an administrative complaint (the"Complaint") seeking to enforce certain provisions of the Act and seeking injunctiverelief, actual and punitive damages;WHEREAS, the Complainant alleges that the Respondent has violated Section804 (b) and Section 805 of the Act, based on race, national origin and familial status;WHEREAS, the Respondent is in the business of originating residentialmortgages secured by single-family residences primarily through both retail andwholesale channels;WHEREAS, the Respondent sells some of the loans it originates to institutionalinvestors in the secondary market;WHEREAS, Complainant alleged that Respondent has instituted one or more

discriminatory clauses in each of its loan programs and its General Loan Requirements,and these policies have included a) minimum property value restrictions; b) minimumloan amounts and loan amount adjustments and c) exclusionary Row Home policies.WHEREAS, Complainant also subsequently alleged that the Respondent did not

consider foster care income as a source of income to qualifu applicants and underwriteresidential mortgage loans in violation of the familial status provisions of Title VIII;WHEREAS, the specific relief provided herein for the Complainant meets their

demands for relief and the Department has determined that the other relief detailed hereinis sufficient to serve the public interest; andWHEREAS, Respondent, in entering into this Conciliation Agreement, admits nodiscriminatory conduct toward Complainant or the communities Complainant serves andno violation of the Act or any applicable law, rule, or regulation; andTHEREFORE, Complainant and Respondent agree to enter into this Conciliation

Agreement to resolve this dispute.I. GENERAL PROYISIONS

The parties acknowledge that this Conciliation Agreement is a voluntaryand full settlement of the Complaint. No parfy has been coerced,intimidated, threatened, or in any way forced to become aparty to thisConciliation Agreement. The parties have read and fully understand thesignificance of the terms set forth herein.This Conciliation Agreement shall become effective on the date it issigned by the Director, of the Office of Fair Housing and Equal

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F.

Opportunity, Midwest Region Office Region V (the "effective date") andshall remain in effect for a period of three (3) years from its effective date.Pursuant to Section 810(bX4) of the Act, this Conciliation Agreement is apublic document.The parties agree that, in the interest of speedily concluding this matter,the Conciliation Agreement may be executed by the parties' signatures onseparate pages. The separately signed pages shall be attached to the bodyof the Conciliation Agreement to constitute one document.The Respondent agrees not to retaliate against or interfere with theComplainant, or any other person(s), on account of (1) their having filed,or aided in the filing of, the Complaint; (2) their having exercised anyright under the Act; (3) their having aided or encouraged any otherperson(s) in the exercise or enjoyment of their rights under the Act.The Respondent agrees and understands that pursuant to a situation, whichreasonably so warrants, during the term of this Conciliation Agreement asdefined under Section I.B., the Secretary on request of Complainant or onhis own motion, may review compliance with this ConciliationAgreement. As a part of such review, the Secretary may require writtenreports concerning compliance,may inspect the premises, examinewitnesses, and examine and copy pertinent records of the Respondent atany reasonable time given reasonable notice by the Department to theRespondent.For the pu{pose of this Conciliation Agreement, the Secretary of HUDshall determine whether the Respondent has complied with the terms ofthis Conciliation Agreement. Whenever the Secretary has reasonablecause to believe that the Respondent has breached the ConciliationAgreement, the Secretary shall refer the matter to the Attorney General forappropriate action under Section 814 of the Act.

II. SPECIFIC RELIEF FOR THE COMPLAINANT AND COMPLAINANT'SRELEASEA. Within three business days of the receipt by the Respondent of a fullyexecuted original of this Agreement, including the approval on behalf ofthe Secretary, Respondent will send a check in the amount of OneHundred Thousand dollars ($100,000.00) to the Complainant and a copyof the check will be provided to the Director of the Office of Fair HousingAnd Equal Opporfunity at the Midwest Region Office, Region V, RalphH. Metcalfe Federal Building, 77 West Jackson Boulevard, Room 2101,Chicago, Illinois, 60604.

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B. In exchange for the Respondent's compliance with the provisions of thisConciliation Agreement, the Complainant hereby waives, releases, andcovenants not to sue the Respondent, or pursue any administrative actionagainst the Respondent, with respect to (1) any matters that were allegedin or were within the scope of the allegations of this Complaint and (2)any and all other matters, claims, or causes of action of any kind, knownor unknown, matured or un-matured, arising, occurring or accruing up tothe date of this Agreement.

III. RELIEF IN THE PUBLIC INTERESTRespondent shall institute a "second review" procedure for all denied loanapplications.Respondent agrees that it will not unlawtrrlly use minimum propertyvalues as an underwriting criterion for any of its loan products and will notunlawfully price row homes or loans that serve low to moderate incomecommunities.

C. Respondent agrees that it will not unlawfully exclude Row Homes fromany of its loan products or use unlawful underwriting criteria to evaluateapplicants for loans secured by Row Homes.D. Respondent agrees that it will not unlawfully exclude foster care incomeas a source of income to qualifu and underwrite residential mortgages.E. Respondent agrees that it will notifr the mortgage loan brokers withwhom it conducts business that it has discontinued its minimum propertyvalue and no Row Home policies.

IV. OTHER PROVISIONSThe parties to this Conciliation Agreement will endeavor in good faith to resolveinformally any differences regarding interpretation and compliance with thisConciliation Agreement. As stated in Section I.F., the Secretary of the UnitedStates Department of Housing and Urban Development shall determine whetherthe Respondent has complied with the terms of this Conciliation Agreement. Inthe event that the parties and HUD are unsuccessful at resolving any disputesregarding interpretation and compliance with the Agreement, the Agreement shallbe enforced pursuant to the provisions of 42 U.S.C. Section 3610(c).

A.

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