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Affirmatively Furthering Fair Housing (AAHF)

Recently, the National Association of Realtors, National Association of Real Estate Brokers, National Association of Hispanic Real Estate Professionals, Asian American Real Estate Association, and the Alliance have expressed their support for the Department of Housing and Urban Development’s Affirmatively Furthering Fair Housing (AAHF) rule. This rule reaffirms the 1968 Affirmative Fair Action, which aims to further fair housing in the United States.

But what exactly does it mean to “further fair housing”?

HUD’s official statement on AAHF rule states that lenders must determine who lacks access to opportunity and address any inequity among protected class groups, promote integration and reduce segregation, and transform racially or ethnically concentrated areas of poverty into areas of opportunity.

While this is all well and good, the question remains: how can lenders accurately and precisely identify inequities among protected classes, especially if they are not part of those groups? Additionally, how can they promote integration and reduce segregation beyond simply following the Fair Housing Act? Finally, how can they transform areas of poverty into areas of opportunity?

It’s worth noting that the responsibility for outlining such policies falls on the shoulders of cities, municipalities, counties, and states. However, it’s still important to understand the impact that these policies may have on mortgage loan companies, especially given the history of well-intended policies going awry and leading to witch hunts against lenders.

For instance, a small mortgage company in Chicago was recently hauled to court by the Consumer Financial Protection Bureau (CFPB) for comments made on a weekly radio show and podcast. Although the company ultimately beat the acquisition in question, the CFPB refiled the case, emboldened by the statutory mandates of the AAHF rule. As a result, the company has had to pay millions in defense against the agency.

This example illustrates the potential dangers of misguided policies.

While we unequivocally support legislation opposing and prosecuting discrimination, we must also ask ourselves whether such policies are effective and, if not, why not. The fact remains that homeownership rates for African Americans are lower today than they were in the 1960s, while Hispanics and Native Americans also face significant challenges. Clearly, our enforcement of fair housing policies is abysmal.

Rather than continuing to pass legislation and set policies that feel good and receive political support, it’s time to focus on real change. This requires making hard decisions and building those decisions from the ground up. Anything less is just more of the same.