A residential lender that denied a Native American couple’s loan request because their property is on an Indian reservation ended up settling with the couple.
The couple, whose primary residence is located on a Native American reservation in Belcourt, N.D., originally applied for a refinance with U.S. Bank, N.A., in May 2013.
But they received a denial notice the following month from the Minneapolis-based company. The stated reason for the denial was, “value or type of collateral not sufficient.”
The couple was allegedly told by a U.S. Bank loan originator that the appraiser who conducted the appraisal for USB Lending Support Services LLC, also known as Red Sky Risk Services LLC, was unable to appraise a property on a reservation.
So in September 2013, the couple filed a complaint with the Department of Housing and Urban Development.
They alleged violations of the Fair Housing Act because they were denied based on their race.
While U.S. Bank disagreed that it discriminated, it did agree to a settlement on Aug. 5 without admitting any guilt.
The settlement calls for the lender to pay to pay the couple’s U.S. Bank credit card balance of $11,490 and approve their refinance application at the same rate and terms that were in place at the time of their application.
In addition, the bank and the appraisal company agreed to amend their policies for mortgages located on Indian reservations in a way that complies with the Fair Housing Act. They are also providing employee training.
“A person’s race and national origin have no effect on their credit worthiness,” HUD Assistant Secretary for Fair Housing and Equal Opportunity Gustavo Velasquez said in the announcement. “HUD will continue to work to give all families an equal opportunity at homeownership by ensuring that lenders meet their obligation to comply with the Fair Housing Act.”
