UNITED STATES DEPARTMENT OF HOUSINC AI{D URBAN DEVELOPMENT

TITLE VIII
COI.JCILIAT ION AGREEfu{ENT

Between

l)eborah Gardner (Complainant)

And
Washington Mutual Bank (Respondent)

Approved by the FHEO Regional Director on behalf of the United States Depafiment of Housing

arrd Urban Development

FHEO CASE NUMBER: 04-07-0192-8

A. PARTIES AND SUB.IECT PROPERTY

. .

ComplainantDeborahGardner(hereinafter:"complainant")

JPMorgan Chase Bank, N.A., as acquirer of cerlain assets and liabilities of Washington Mutual Bank fiom the Federal Deposit Insurance Corporation acting as receil'er (the named delendant 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

A conrplaint u'as flled on November I 5, 2A06, and amended on March 27 ,20A7 n,ith the United States Department of Housing and Urban Developrnent (the Depaftment) alleging that Complainant rvas injured by a discriminatory act of Responderrt. Conrplainant alleges that Respondent, 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 on
tlre basis of race.

Respondent denies having discrinrinated against Complainant, but agrees to settle the clains in the underlying action by entering into this Conciliation Agreenrent. The Agreernent does not constitute 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 parlies
to 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 under statc or lederal law nor a Conciliation Agreement pursuant to the Act, unless and until sr.rch time as it is approved by the U.S. Department of Housing and Urban Development, through the FHEO Regional 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 of Housing and Urban Development (HUD).

E. GENERAL PROVISIO}{S

4. The parties acknorvlcdge that this Agreement is a voluntary and full setrlenlelit of the disputecl cornplaint. 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 this Agreement.

5. The Respondent acknou,ledges that it has an affirmative duty not to discrirninate under the Act. and that it is unlarvful to retaliate against arly person because that person has made a complaint, testified, assisted or participated in any manner in a proceeding under the Act. Respondent further acknorvledges that any subsequent retaliation or discrimination constitutes both 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 upon Respondent, 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 this Agreement 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 investigate any other complaint involving Respondent made pursuant to the Fair Housing Act, or any other complaint within the Departrnent's jurisdiction.

9. No amendnrent to, modification oi or rvaiver of any provisions of this Agreement shall be eflective unless: (a) all signatories or their successors to the Agreement agree in writing to the amendment, 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 Regional Director.

10. The parties agree that the execution of this Agreement may be accornplished by

separate execution of consents to this Agreement, and that the original executed signature pages attached to the body of the Agreement constitute one docuntent.

I l. Complainant hereby forever rvaives, releases, and covenants not to sue the Departrlent or Respondent, its heirs, execLltors, assigns, agents, employ'ees and attorneys ',r,ith regard to any and all 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 been filed in an-v action or suit arising lrom said subject matter.

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

attonlevs rvitlr regard to inry and all claims, dama,ees and injuries of u'hatever nature 'ir'hether pl'esently known or unknorvrr. arising out of the subject ntatter of IIUD Casc Nutnber 0107{1192-8 or u,}rich could have been filed in any action or suit arising lrom said subject matter.

F. RET-IEF FOR COI\,IPLAINANT

13. To avoid any future costs and e.{penses and as a goodrvill gesture to Complainant, the Respondent agrees to pay the Conrplainant Seven Thor"rsand Dollars (57,000.00) in exchange lbr the disnrissal of this conrplaint. Tlre money rvill lre paid u'ithin forirteen (14) dai:s of the si-slning

of tlic- ConciIiation Agreentent.

C. TUITTIIER AC'|IONS: 14. ln additiorr to Cornplainants'release contained above, Conrplainant lrereby withdrarvs, i.r,ith prejudice, 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) alfiliated rvith or ir"r privity n,ith them or any of them including. but not lirnited to. Washington Mutual Bank and JP Morgan/Chase.

15. In exchange lor tlie Respondent's trrerformance of the provisions of this Agreement, the Conrplainant hcreby rvair.es, releases and covenants not to file any civil or other action against the Respondent, or to undeftake further administrative action against the Respondent, rvith respect to the matters rvhich were or rvhich rnight have been alleged in the subject fair hor-rsing conrplair-rt arrd rvith respect to all claims or causes of action of any kind r,r'hatsoever that Cornplainant has or might have dircctly or indirectly attrilrutablc to any act or omission by Respondent in relation to the origination of Conrplainant's resitlential ntoftgage loan. This release and rvaiver applies to the cornplaint existing betrveen the signatories to this Agreernent, and applics to any other contirlaints filecl bv Cor"nplainants rvhiclr nray be pending *'ith the Department, 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 complaint or 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

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

17. Respondent

rvill send a communication to its personnel involved in processing and sen'icing

of loans to review its Fair Lending Policy, or provide Fair Lending Training. The Respondent agrees to track the employees that have reviewed the policy or have taken the training. It is understood that heritage Washington Mutual Bank employees may have alreatly taken the lair lending training referred to in this paragraph after.lPMorgan Chase's acquisition of certain assets and liabilities of Washington Mutual Bank from the Federal Deposit Insurance Corporation acting as receiver and are not required to retake this training) except as required in the ordinary course of business by Respondent. For any heritage Washington Mutual Bank employees
involved in the processing and servicing of loans that have not received Fair Lending training since the acquisitior-r, Respondent will provide Fair Lending training within trvelve months of the effec{ive date of this agreement.

MONITORING

19. The Department shall determine compliance with the terms of this Agreement. During the

tenn of this Agreement, HUD may review compliance with this Agreement. As part of sr.rch review, 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 its full cooperation in any nronitoring revierv undertaken by HUD to ensure compliance with this Agreement.

J. CONSEQUENCES OF BREACH

20. Whencver the Depanment has reasonable cause to believe that Respondent has breached this Agreement, the nratter ma-v be referred to the Attornev General of the United States, tc commence a civil action in the appropriate U. S. District Court. pursuant to {S 810(c} and 8l-t{bX2) of the Act.

K. SIGNATURES
Deborah Cardner

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

L. APPROVAL
Marcella O Brown, Region

Director

Office of Fair Housing and Equal Opporlunity

D. EFFECTWE DATE 2. The parties expressly agree that this Agreement constitutes neither a binding contract under state or federal law nor a Conciliation Agreement pursuant to the Act, unless and until such time as it is approved by the U.S. Department of Housing and Urban Development, through the FFIEO Regional Director, or his or her designee.
3. This Agreement shall become effective on the date on which it is approved by the Director, Fair Housing and Equal Opportunity fmo) Region IV in Atlanta, Georgia of the United States Department of Housing
and Urban Development

(HttD).

E. GENERALPROVISIONS

4. The parties acknowledge that this Agreement is a voluntary and full settlement of the disputed complaint. The parties affirm that they have read and fully understand the terms set forth herein. No parfy has 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 acknowledges that any subsequent retaliation or discrimination constitutes both a material breach of this Agreement, and a

statutory violation ofthe Act.

6. This Agreement, after it has been approved by the FFIEO Regional Director, or his or her designee, is binding upon Vanderbilt Mortgage Company, its employees, heirs, successors and assigrs and all others in active 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 the FFIEO 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 other complaints involving Respondent made pursuant to the Fair Housing Act, or any other complaints within the Department'
s

jurisdiction.

9. No amendment to, modification of or waiver of any provisions of this Agreement shall be effective unless: (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 consents to this Agreement, the original executed signature pages to be attached to the body ofthe Agreement to constitute one document.

of

I l. Stacey Ellis, Complainant, hereby forever waives, releases, and covenants not to sue the Department or Vanderbilt Mortgage Company of Maryville, Tennessee, its heirs, executors, assigns, agents, employees and attomeys with regard to any and all claims, damages and injwies of whatever nature whether presently known or unknown, arising out of the subject matter of HUD Case Number 04-09-0534-8 or which could have 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,

agents, officers, board members, employees and attomeys with regard to any and all claims, damages and injuries of whatever nature whether presently known or unknown, arising out of the subject matter of HUD Case Number 04-09-0534-8 or which could have been filed in any action or suit arising from said subject

matter.

F. RELIEF FOR COMPLAINANT

13. The Vanderbilt Mortgage Company of the City of Maryville, Tennessee agrees to take the following actions, and, as set forth in this Agreement, will provide the Department with written cerlification that these requirements have besn met:

a.

The Vanderbilt Mortgage Company agrees to pay the ctrrent value of the Complainant's home. This value of the home is now appraised at $30,000 (land not included). A certified check in the amount of $30,000 will be sent to Pat W. Green at 1835 Assembly Street in Columbia, South Carolina2%Al in the name of Stacey Ellis, the Complainant together with a signed copy ofthe conciliation agreement.

G. RELIEF IN THE PUBLIC INTEREST

14. Within thitty (30) days ofthe effective date of this Agreement, Respondent shall inform all of its agents and employees responsible for compliance with this Agreement, including any offtcers and board members, of the terms of this Agreement.

H. MONITORING
15. The Department shall determine compliance with the terms of this Agreement. During the term of this Agreement, HUD may review compliance with this Agreement. As part of such review, HUD may inspect Respondent's property identified in Section A ofthis Agreement, examine witnesses, and copy pertinent records of Respondent. Respondent agrees to provide their full cooperation in any monitoring review undertaken by HLID to ensure compliance with this Agreement. I. REPORTING AND RECORDKEEPING 16. Within forty-five (45) days ofthe effective date of this Agreement, Respondent shall certify to the FTIEO 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. Sutton Regional Director Office of Fair Housing and Equal Opportunity 40 Marietta Skeet Atlanta, Georgia 30303-2806

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

SIGNATURES

Stacey Ellis, Complainant

Date

Wally Tyser, Respondent

Vanderbilt Mortgage Company
Date

J.

APPROVAL

James N. Sutton

Date

Date

FHEO Region [V Director

WHEREAS, the Complainant alleges that the Respondent has violated Section 804(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 investors in the secondary market; WHEREAS, Complainant NCRC alleges that Respondent SouthStar has engaged in a pattern and practice of discrimination against African Americans and Latinos in the policies and practices it uses to determine eligibility for some of its mortgage loan products 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 their demands for relief, and the Department has determined that the other relief detailed herein is sufficient to vindicate the public interest; and WHEREAS, Respondent's underwriting criteria is based upon and dependent upon its investors' underwriting criteria; and WHEREAS, Respondent, in entering into this Conciliation Agreement, denies any discriminatory conduct toward Complainant or the communities Complainant serves; and WHEREAS, Respondent is committed to providing equal lending opportunities by following fair lending practices and by increasing home ownership opportunities, and seeks to be an industry leader in responsible lending practices; and WHEREAS, Respondent desires to avoid further expense in defending this Complaint; THEREFORE, Complainant and Respondent agree to enter into this Conciliation Agreement to resolve this dispute without an evidentiary hearing.

I. GENERAL REMEDIAL PROVISIONS

A.
Respondent agrees that it, together with its officers and employees, shall not violate any of the provisions of the Act, or any applicable state or local fair housing laws, in future real estate transactions covered by these laws.

B.

The parties acknowledge that this Conciliation Agreement is a voluntary and full settlement of the Complaint. No party has been coerced, intimidated, threatened, or in any way forced to become a party to this

Conciliation Agreement. The parties have read and fully understand the significance of the terms set forth herein.
C.

This Conciliation Agreement shall become effective on the date it is signed by the Director, of the Office of Fair Housing and Equal Opportunity, Philadelphia Region III (the "effective date") and shall remain 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 a public document.

D.

E.

The parties agree that, in the interest of speedily concluding this matter, the Conciliation Agreement may be executed by the parties' signatures on separate pages. The separately signed pages shall be attached to the body of the Conciliation Agreement to constitute one document.
Respondent agrees to designate an employee to receive complaints from consumers, real estate agents, and mortgage brokers. This person will report directly to a member of Respondent's upper management, to ensure that management is aware of problems as they occur, and shall have sufficient authority to resolve problems quickly and equitably. Respondent has instituted a "second review" procedure for all denied loan applications. The second review shall be carried out by the Credit fusk Manager or a senior underwriter who has received training in Respondent's underwriting procedures and fair housing (as described below). The second review official shall ensure that all mortgage loan applications are being reviewed in a consistent manner without any discrimination on a prohibited basis. The second review official shall be empowered to overturn any underwriting decision if in the judgment of this official, an error was made. A log of files reviewed and actions taken will be maintained by the Respondent for the duration of this Agreement.

F.

G.

H. Respondent agrees that if it advertises its loan products to consumers, then the advertising shall be accomplished through media that serves the general public, as well as media that serves the African-American, and Latino communities. All advertising will comply with the Act and convey the message that customers a.re welcome to apply and have their application processed without regard to their race, color, religion, sex, national origin, handicap, or familial status. I.
Respondent agrees that it

will not

use the properly type of row home as an

underwriting criterion to exclude borrowers for any of its loan products. Respondent agrees that it will underwrite loans secured by row homes using the same underwriting criteria for loans secured by condominiums and townhomes.

J.

Respondent may use minimum property value as one of many underwriting criteria to determine the eligibility of an applicant for a loan, but may not use minimum properly value as an absolute bar to the making of any loan. To the extent Respondent uses minimum property value as one of many underwriting criteia, it will ensure that it applies all of the criteria in compliance with the Act.

K.

Respondent agrees that it will notiff the mortgage loan brokers and secondary market investors with whom it conducts business that it has discontinued its prohibition against lending on row homes under $100,000.00 in value and row homes in Baltimore.

II.

EMPLOYEE TRAINING
A.
CURRENT EMPLOYEES: Within 180 days after the date of this Agteement, all of the Respondent's officers, and employees engaged in soliciting, processing, underwriting, reviewing, or approving loans shall complete a training course that includes the following elements:

1. 2. 3. 4.
B.

The Respondent's responsibilities under this Agreement; The purpose of and prohibitions contained in the Act as it relates to mortgage lending; The Respondent's anti-discrimination policy; and The Respondent's disciplinary policy pertaining to violations the Act by employees.

of

NEW EMPLOYEES: Commencing ninety (90) days after the date of this Agreement and thereafter for the duration of this Agreement, the Respondent's new employees hired to solicit, process, underwrite, review, or approve loans shall complete the training course described in the above paragraph within thirty (30) days of employment. TRAINING FREQUENCY: The Respondent's officers and employees shall complete the same training approximately one year after the initial training is delivered, and againtwo years after the initial training is
delivered.

C.

D.

TRAINING FORM: Each person who is required to complete a training course under this section of this Agreement shall execute a form, which shall be maintained by the Respondent, acknowledging:

l. 2.
III.

Completion of the training course, and

That they have received, read, and understand the Respondent's policies regarding discrimination, including the Respondent' s disciplinary policy regarding violations of the Act.

RECORD-KEEPING AIID REPORTING REQUIREMENTS

A.

During the term of this Agreement, Respondent shall retain all mortgage loan application files that were submitted (regardless of Respondent's final determination on the application) and all documents and notices relevant to such underwriting decisions and all records of the second review official. Respondent will also maintain copies of all advertising done pursuant to Section I.I. above.

IV. SPECIFIC RELIEF FOR THE COMPLAINANT

RELEASE
A.

AND COMPLAINANT'S

Respondent shall pay Complainant a total of five hundred thousand ($500,000.00) dollars. On September 15, 2006, Respondent will provide to the Complainant's attorney, Relman & Associates ("Complainant's Attorney"), a check in the amount of one hundred twenty-five thousand ($125,000.00) dollars made payable to the Complainant's Attorney. On January 8,2007,2008, 2009, and 2010, Respondent will provide to the Complainant's Attorney a check in the amount of ninety three thousand seven hundred frfty ($93,750.00) dollars made payable to Complainant's Attorney. A copy of all checks will be provided to the Director of the Office of Fair Housing And Equal Opportunity, 100 Penn Square East, Philadelphia, PA 19107. On January 8,2007,2008, 2009, and20l0 the Respondent will provide Complainant's Attorney with a copy of its underwriting guidelines so that Complainant can ensure that Respondent is in compliance with this Conciliation Agreement. All documents provided shall be held in strict confidence and may not be disseminated to third parties. The parties will comply with Section V(A) below in resolving any differences regarding interpretation and compliance with this Conciliation Agreement.

B.

C.

In exchange for the Respondent's compliance with the provisions of this Conciliation Agreement, the Complainant hereby waives, releases, acquits, discharges, and covenants not to sue the Respondent, or pursue any administrative action against the Respondent in any forum, with respect to any matters that were alleged in, were within the scope of the allegations, or could have been alleged in this Complaint against this Respondent. In exchange for Complainant's agreement to resolve its claims by executing this Conciliation Agreement, the Respondent hereby

waives, releases, acquits, discharges, and covenants not to sue the Complainant, or pursue any administrative action against the Complainant in any forum, with respect to any matters related to the allegations in the Complaint. D. Respondent agrees and understands that pursuant to a situation, which reasonably so warrants, during the term of this Conciliation Agreement as defined under Section I.C., the Secretary (the Secretary) of HUD on request of Complainant or on his own motion, may review compliance with this Conciliation Agreement. As apart of such review, the Secretary may require written reports concerning compliance, may inspect the premises, examine witnesses, and examine and copy pertinent records of the Respondent at any reasonable time given reasonable notice by the Department to the Respondent. For the purpose of this Conciliation Agreement, the Secretary shall determine whether the Respondent has complied with the terms of this Conciliation Agreement. Whenever the Secretary has reasonable cause to believe that the Respondent has breached the Conciliation Agreement, the Secretary may refer the matter to the Attorney General for appropriate action pursuant to 42 U.S.C. Section 814(bX2).

E.

V. OTHER PROYISIONS
A.
The parties to this Conciliation Agreement will endeavor in good faith to resolve 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 with the terms of this Conciliation Agreement. In the event that the parties and HUD are unsuccessful at resolving any disputes regarding interpretation and compliance, the Conciliation Agreement may be enforced pursuant to the provisions of 42 U.S.C. Section 3610(c). The terms of this Agreement will bind any assignee or successor in interest of the Complainant and the Respondent. The parties assume that any assignee or successor in interest to Respondent will voluntarily implement the provisions of this Agreement, but if any such assignee or successor in interest declines to implement voluntarily the provisions of this Agreement, it shall present to the Department its proposed plan of operation. If the Department concludes that the proposed plan will hinder the attainment of the goals of this Agreement, it shall present such concems to the successor in interest and attempt to resolve the differences voluntarily. Any differences that cannot be resolved by the parties may be presented to the HUD's Offrces of the Administrative Law Judges for resolution.

B.

Case

SIGNATURE PAGE Number: 03-06-0378-8

John Taylor, President and CEO

Date

For National Community Reinvestment Coalition Complainant

SIGNATURE PAGE Case Number: 03-06-0378-8

Kirk Smith, President

For SouthStar Funding, LLC Respondent

Date

Case

SIGNATURE PAGE Number: 03-06-0378-8

APPROVED ON BEI{ALF OF TI{E SECRETARY:

Wanda S. Nieves, Director Region III, Office of Fair Housing and Equal Opportunity

Date

CONCILIATION AGREEMENT
Between
The United States Department of Housing and Urban Development and

National Community Reinvestment Coalition 727 lsth Street, Suite 900 Washington, DC 20005 Complainant
and

First Indiana Bank, National Association

135 North Perursylvania Street

Indianapolis,In 46204
Respondent

HUD Case Number: 05-07-0583-8

John Taylor, President

& CEO of the National Community Reinvestment

Coalition (Complainant), filed an administrative complaint under the Fair Housing Amendments 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 Conciliation Agreement (hereinafter known as "Agreemenf'), as follows: WHEREAS, the Complainant is a non-profrtorgantzanon that has the mission of increasing fair and equal access to credit capital, and banking services and product; WHEREAS, the Complainant has launched aNational Civil Rights Best Practices campaign for corporations, with a special focus on lenders, insurerso loan servicers, real estate and valuation professionals, and securitizers who are supportive of Complainant's
mission;

WHEREAS, the Complainant has filed an administrative complaint (the "Complaint") seeking to enforce certain provisions of the Act and seeking injunctive relief, actual and punitive damages; WHEREAS, the Complainant alleges that the Respondent has violated Section 804 (b) and Section 805 of the Act, based on race, national origin and familial status; WHEREAS, the Respondent is in the business of originating residential mortgages secured by single-family residences primarily through both retail and wholesale channels; WHEREAS, the Respondent sells some of the loans it originates to institutional investors 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) minimum loan 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 underwrite residential 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 herein is sufficient to serve the public interest; and WHEREAS, Respondent, in entering into this Conciliation Agreement, admits no discriminatory conduct toward Complainant or the communities Complainant serves and no violation of the Act or any applicable law, rule, or regulation; and THEREFORE, Complainant and Respondent agree to enter into this Conciliation Agreement to resolve this dispute.

I. GENERAL PROYISIONS
A.
The parties acknowledge that this Conciliation Agreement is a voluntary and full settlement of the Complaint. No parfy has been coerced, intimidated, threatened, or in any way forced to become aparty to this Conciliation Agreement. The parties have read and fully understand the significance of the terms set forth herein.

B.

This Conciliation Agreement shall become effective on the date it is signed by the Director, of the Office of Fair Housing and Equal

Opportunity, Midwest Region Office Region V (the "effective date") and shall remain in effect for a period of three (3) years from its effective date.
C.

Pursuant to Section 810(bX4) of the Act, this Conciliation Agreement is a public document.

D.

The parties agree that, in the interest of speedily concluding this matter, the Conciliation Agreement may be executed by the parties' signatures on separate pages. The separately signed pages shall be attached to the body of the Conciliation Agreement to constitute one document. The Respondent agrees not to retaliate against or interfere with the Complainant, or any other person(s), on account of (1) their having filed, or aided in the filing of, the Complaint; (2) their having exercised any right under the Act; (3) their having aided or encouraged any other person(s) in the exercise or enjoyment of their rights under the Act. The Respondent agrees and understands that pursuant to a situation, which reasonably so warrants, during the term of this Conciliation Agreement as defined under Section I.B., the Secretary on request of Complainant or on his own motion, may review compliance with this Conciliation Agreement. As a part of such review, the Secretary may require written reports concerning compliance,may inspect the premises, examine witnesses, and examine and copy pertinent records of the Respondent at any reasonable time given reasonable notice by the Department to the Respondent. For the pu{pose of this Conciliation Agreement, the Secretary of HUD shall determine whether the Respondent has complied with the terms of this Conciliation Agreement. Whenever the Secretary has reasonable cause to believe that the Respondent has breached the Conciliation Agreement, the Secretary shall refer the matter to the Attorney General for appropriate action under Section 814 of the Act.

E.

F.

G.

II.

SPECIFIC RELIEF FOR THE COMPLAINANT AND COMPLAINANT'S RELEASE

A.

Within three business days of the receipt by the Respondent of a fully executed original of this Agreement, including the approval on behalf of the Secretary, Respondent will send a check in the amount of One Hundred Thousand dollars ($100,000.00) to the Complainant and a copy of the check will be provided to the Director of the Office of Fair Housing And Equal Opporfunity at the Midwest Region Office, Region V, Ralph H. Metcalfe Federal Building, 77 West Jackson Boulevard, Room 2101, Chicago, Illinois, 60604.

B.

In exchange for the Respondent's compliance with the provisions of this Conciliation Agreement, the Complainant hereby waives, releases, and covenants not to sue the Respondent, or pursue any administrative action against the Respondent, with respect to (1) any matters that were alleged in 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, known or unknown, matured or un-matured, arising, occurring or accruing up to the date of this Agreement.

III.

RELIEF IN THE PUBLIC INTEREST

A.
Respondent shall institute a "second review" procedure for all denied loan applications.
Respondent agrees that it will not unlawtrrlly use minimum property values as an underwriting criterion for any of its loan products and will not unlawfully price row homes or loans that serve low to moderate income communities. Respondent agrees that

B.

C. D. E.

it will not unlawfully exclude Row Homes from

any of its loan products or use unlawful underwriting criteria to evaluate applicants for loans secured by Row Homes.
Respondent agrees that
as a source

it will not unlawfully exclude foster care income of income to qualifu and underwrite residential mortgages.

Respondent agrees that it will notifr the mortgage loan brokers with whom it conducts business that it has discontinued its minimum property value and no Row Home policies.

IV. OTHER PROVISIONS

The parties to this Conciliation Agreement will endeavor in good faith to resolve informally any differences regarding interpretation and compliance with this Conciliation Agreement. As stated in Section I.F., the Secretary of the United States Department of Housing and Urban Development shall determine whether the Respondent has complied with the terms of this Conciliation Agreement. In the event that the parties and HUD are unsuccessful at resolving any disputes regarding interpretation and compliance with the Agreement, the Agreement shall be enforced pursuant to the provisions of 42 U.S.C. Section 3610(c).

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