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 National Fair Housing Alliance & HUD Investigations Confirm Discrimination! Where's the outcry from the National Association of Realtors? On July 18, 2008, the U.S. Department of Justice filed a federal lawsuit against the real estate brokerage doing business as Re/Max East-West alleging discrimination on the basis of race and national origin in violation of the Fair Housing Act.
Re/ Max East-West is a major brokerage company serving DuPage and Cook Counties in Illinois. An undercover investigation of Re/Max East-West was conducted by the National Fair Housing Alliance and the investigation unturned a repeated pattern of racial discrimination among real estate agents in as many as 12 cities. The NFHA found that Re/Max East-West agents time and again steered potential white and Latino homebuyers to areas where their race predominated. A Re/Max agent showed a Latino tester three homes in predominantly African-American and Latino areas, homes that were markedly less expensive than those she could afford, and told her that he did not have a lot of time for her.
Conversely, the same agent showed a white tester nine homes, the majority of which were in predominantly white areas such as Bartlett, Geneva and St. Charles. The agent offered to show the white tester many more homes in predominantly white neighborhoods as far as a 50 mile drive away.
One real estate agent, John DeJohn, also made illegal comments. He told a white tester, "I don't care if you are a bigot. If we go to an area and you don't like it, just let me know. I can't be a bigot but you can be one."
In addition, DeJohn informed a white tester that the two homes they viewed together in a predominantly African-American and Latino area were "dumps" and "repos" even though he had told the Latino tester that one of those homes "might be good for you." And while the white tester received multiple follow-up calls subsequent to his appointment with the real estate agent, the Latino tester received none.
"That agents of Re/Max East West were allowed to engage in such blatant discriminatory behavior is outrageous," said Shanna L. Smith, President and CEO of the National Fair Housing Alliance. "It is sad to think of how much the community's residential segregation can be attributed directly to their sales practices."
Sad indeed. It makes you wonder how much of this is going on across the USA. The Justice Department's action comes as a result of a complaint filed by the National Fair Housing Alliance (NFHA) with the U.S. Department of Housing and Urban Development (HUD).
In August, 2005, HUD began an investigation and later found evidence that agents of Re/Max East-West steered homebuyers based on race and national origin, made discriminatory statements, and treated individuals differently based on their national origin. After HUD issued a charge of discrimination, NFHA filed an election to have the case heard in federal court. As a result, the lawsuit was filed in the U.S. District Court for the Northern District of Illinois, Eastern Division by the Justice Department.
"We are pleased with HUD's decision to issue a charge," said Ms. Smith. "Our investigation of this company revealed egregious examples of housing discrimination and we hope that this will send a clear message to the housing industry that real estate agents and companies must be held accountable to the law."
After the NFHA filed a HUD complaint in 2005, HUD initiated an investigation based on the NFHA's findings and issued a charge of discrimination on June 9, 2008. The Justice Department then brought suit against Re/Max and John DeJohn in United States v. S & S GROUP, LTD. d/b/a REMAX EAST-WEST, through its successor in interest, S&W ELMHURST, LLC, also d/b/a REMAX EAST-WEST and JOHN DEJOHN (Case no. 08-CV-4099).
This investigation was part of NFHA's multi-year, multi-city enforcement project to test for housing discrimination in real estate companies identified by HUD as having previously discriminated during its Housing Discrimination Study.
NFHA's 12 city investigation found an alarming 87% rate of racial steering and an almost 20% rate of denial for African-Americans andLatinos. The Fair Housing Act prohibits housing discrimination on the basis of race, color, national origin, religion, sex, familial status and disability.
DeJohn, who left Re/Max in 2004 and now works for a Hillside real estate firm, could not be reached for comment Tuesday. But he denied the allegations when they first surfaced in August 2005.
"Never. Ever," he told the Daily Herald. "I will sell to anyone, anywhere."
Chris Carlos, who represents both Re/Max East-West and DeJohn, added: "Both of my clients deny the allegations and are looking forward to proving their innocence if need be through litigation," said Chris Carlos, who represents both Re/Max East-West and DeJohn.
Now I know some will say this is just a small sample of real estate agents but does that really matter? I won't even proffer that the sample size is sufficient to show evidence of a prevailing problem. Let's leave it at 12 cities. Even just in these towns this information is bound to be news in communities across the country. Yet the NAR has not bothered to even respond. In fact, not many real estate agents even want to talk about this.
When are Realtors going to learn. Your image is damaged. The consumers don't trust you. Your prestige and credibility are both at all time lows. Instead of spending millions of dollars on frivolous "dead on arrival" advertising campaigns, perhaps it should really seek to implement a campaign that seeks to instill consumer confidence.
The image of some is hurting the pocketbooks of many. Why aren't the rank and file Realtors taking a stand and policing from within? Instead we get incidents like this that further cast a stain on the real estate profession.
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