New HUD office to monitor mortgage lending practices.

In order to ensure equality in today's lending and overall housing market environment, the U.S. Department of Housing and Urban Development's Office of Fair Housing and Equal Opportunity (FHEO) announced that it is creating a new Fair Lending Division that will review mortgage lending practices throughout the nation.

HUD has hired a senior-level economist and has advertised to hire five fair lending specialists to enhance its capacity to investigate allegations of mortgage lending discrimination.

"We have launched a record number of investigations this year and have recently announced several major fair lending settlements," said Kim Kendrick, HUD's assistant secretary for Fair Housing and Equal Opportunity.

"But in today's lending environment, where consumers sometimes become victims of discriminatory practices, we have to do more to educate and protect potential homeowners and enforce the law."

Specifically, the new Fair Lending Division will investigate discrimination complaints against lenders who have allegedly violated the Fair Housing Act by refusing to make mortgage loans, refusing to provide the same information regarding loans, or imposing different terms or conditions for granting a loan, such as factors based on the race or national origin of the borrower.

The division will also conduct investigations where lending patterns or other information suggests discrimination by a lender, but no individual has come forward to file a complaint. In addition, the division will conduct HUD's fair lending oversight of the Government-Sponsored Enterprises, Fannie Mae and Freddie Mac, to ensure their underwriting policies and practices comply with fair lending laws.

"Lending cases are complex and require extensive resources to review and compare mountains of loan data," explained Kendrick.

"The addition of this Fair Lending Division will allow the Department to enhance the quality and speed at which the Department conducts lending investigations."