STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BRENDA DAVIS, )

)

Petitioner, )

)

vs. ) Case No. 00-0736

) DUVAL COUNTY HOUSING FINANCE ) AUTHORITY, FIRST UNION NATIONAL ) BANK, and ATLANTIC BUILDERS, INC., )

)

Respondents. )

)

RECOMMENDED ORDER

On June 13, 2000, a formal administrative hearing was held in this case in Jacksonville, Florida, before William R. Pfeiffer, Administrative Law Judge, Division of Administrative

117 West Duvall Street, Suite 480 Jacksonville, Florida 32202

STATEMENT OF THE ISSUE

Whether any Respondent committed a discriminatory act upon Petitioner in violation of Title VIII of the Civil Rights Act of

1968, as amended by the Fair Housing Act of 1988 and Chapter 760 of the Florida Statutes?

PRELIMINARY STATEMENT

On February 3, 1997, Petitioner filed a complaint with Housing and Urban Development (HUD) alleging that Respondents discriminated against her regarding the terms and conditions of the sale and financing of a house she sought to purchase thereby denying her the full benefit of the Fair Housing Act. The case was subsequently dual filed with the Florida Commission on Human Relations (FCHR) on July 23, 1997. The FCHR issued an investigatory determination finding there was "No Probable Cause to believe discrimination exists. . . on the basis of race regarding the issue of terms and conditions in the financing of a property." Petitioner contested and the matter was forwarded to the Division of Administrative Hearings (DOAH) on February 11, 2000.

At the hearing, Petitioner presented only her own testimony and introduced Exhibit Numbers 1-3 and 5-6 into evidence.

Petitioner's Exhibit Number 4 was proffered for the record.

Respondent Duval County Housing Finance Authority presented the testimony of Mr. Mike Martin and introduced DCHFA Exhibits Numbers 1-4 into evidence.

Respondent Atlantic Builders, Inc. presented the testimony of Mr. Jack Daniels, an independent contractor with ABI, and

introduced Respondent's Joint Exhibit Number 1, the deposition testimony of Brenda W. Davis, taken June 2, 2000.

Respondent First Union National Bank presented the testimony of Holly Cleveland and Cecillia Sowell and introduced FUNB Exhibit Number 1.

The transcript of the hearing was not requested by any of the parties. On June 26, 2000, Respondents filed a Joint Notice of Waiver relinquishing their right to present proposed recommended orders.

Petitioner, upon request, was given an extension of time to file her proposed recommended order, and failed to file the same.

FINDINGS OF FACT

1. The Florida Commission on Human Relations is the state agency charged with the responsibility of promoting and encouraging fair treatment in housing in accordance with the provisions of Chapter 760, Florida Statutes. Such authority includes, but is not limited to, issues involving the Fair Housing Act found at Sections 760.20-760.37, Florida Statutes.

2. In 1995, Petitioner, Ms. Davis, applied to purchase a home using financing through a high-risk, public/private partnership government home loan program operated by the Duval County Housing Finance Authority (DCHFA) entitled the Value Homes Program II. Following conversations with Mr. Mike Martin, the Finance Director of DCHFA, Petitioner was initially informed that

   she could purchase a home up to the value of $98,000, depending on her income and past credit history.

3. Petitioner was directed to Ms. Holly Cleveland, a loan specialist for First Union National Bank (FUNB) for processing. Upon review, Ms. Cleveland informed Ms. Davis of an outstanding judgement on her credit file in an amount of $1,000. Ms. Davis denied owing the amount, refused to satisfy the judgement, and provided a written explanation of the alleged debt obligation.

4. Ms. Davis was prequalified by FUNB for a loan amount not to exceed $86,900 at an interest rate of 6.11 percent. After selecting the model type, Petitioner signed a contract with Mr. Jack Daniels, a representative for the Respondent Atlantic Builders to construct the new home.

5. FUNB contacted Petitioner regarding loan documents relating to the Value Homes Program II, and requested additional information explaining the default information from USA Loan on her credit report. Petitioner provided the bank with the information, and Ms. Scott relayed it to Mr. Pocapanni, the director of Duval County's loan program.

6. On April 5, 1996, Petitioner's Realtor, Ms. Maestas, informed Ms. Davis that she had been approved for the loan. Minutes later, Ms. Davis received a call from Ms. Scott, confirming the approval.

7. However, on August 23, 1996, Ms. Scott inquired again about the judgement and urged Petitioner to speak with Mr. Rick

   Homes, FUNB Representative to rectify the situation. On August 28, Ms. Davis was advised by the representatives of FUNB that they were having difficulties securing the money from Duval County's Value Homes Program II due to the outstanding judgement against her. The closing on her new home had been delayed.

8. In an effort to facilitate the closing, FUNB agreed to assist her and pay the outstanding judgement. Ms. Davis was informed that she would close on her new home on August 30, 1996.

9. On August 30, Petitioner and Mr. Maestas attended the final inspection of the home. Mr. Daniels, the contractor, strongly urged her to make an immediate decision on the home because interest rates were escalating. Ms. Davis felt his behavior was unprofessional toward her and Mr. Maestas. Duval County Housing Finance Autholrity (DCHFA)

10. Pursuant to DCHFA's loan program rules, gifts of cash for all or part of the closings costs, pre-paids or optional down payment are permitted only if the donation is a bona fide gift, and repayment is neither expected nor implied. Additionally, the gift donor may not be a party who has a direct interest in the sale of the property, such as the builder, seller, lender, or any one associated with them.

11. In addition, all outstanding charge-offs, judgements and liens are required to be satisfied prior to closing.

12. At least thirty other applicants have been turned down due to outstanding judgements under the Value Homes Program II, many of which were filed as a result of the non-payment of rent.

13. Since 1992, 66 percent of the county's SHIP funds, consisting of seven affordable housing loan programs including Value Homes II, have gone to minority families.

14. Ms. Davis had a judgement entered against her for nonpayment of rent which she refused to pay. The Value Homes Program II policy clearly states that an outstanding judgement must be paid in full before a purchase money mortgage loan can be made. It has been the requirement of the program since its inception in 1992.

15. Although FUNB and her Realtor offered to pay the judgement for Ms. Davis, it was not permitted under the guidelines. Thereafter, FUNB offered to make Ms. Davis a program authorized unsecured loan to pay the judgement yet she refused. There is no evidence of discrimination.

    First Union National Bank (FUNB)

    
    

16. As stated previously, Petitioner applied for a residential mortgage with FUNB under the Value Homes Program II, a public-private partnership between the Duval County Housing Finance Authority and seven local banks, including FUNB. Her application was submitted to FUNB by the Jacksonville Housing Partnership in accordance with the program guidelines. Ms. Davis' initial loan request was $88,200 to finance the purchase

    of an existing home. On her application, she disclosed the outstanding judgement entered against her. Mistakenly however, the loan officer, who was unfamiliar with all of the program guidelines, informed Ms. Davis that she would submit her application to the underwriter for processing. She was locked in at the interest rate of 6.11 percent for a period of 90 days.

17. On March 26, 1996, Petitioner signed a contract with Atlantic Builders for the construction of a new home. Petitioner completed another loan application for a lower amount of $78,295. Ms. Davis' loan application was held pending receipt of (1) evidence of the source of funds at closing; (2) an explanation letter for late payments on a loan to USA group; and (3) receipt of the new contract to purchase. FUNB received Petitioner's credit report on March 25, 1996, which reflected the judgement referenced in her application, as well as a customer statement concerning the judgement submitted to the credit bureau in May 1994.

18. Petitioner's financing was conditionally approved on April 5, 1996. She was provided a commitment letter requiring her to furnish FUNB with a note and a first mortgage. Due to delays in the completion of the home, Ms. Davis was locked in for an additional 90 days at the existing program mortgage rate of

    6.00 percent in June 1996.

    
    

19. Construction of the new house was completed in early August of 1996, and Ms. Davis was scheduled to close on August

    28, 1996. FUNB noticed that upon receipt and review of the title commitment, that the judgement in the amount of $1,035 held by Ann J. Wall remained. Unless the judgement was satisfied, FUNB was unable to comply with the loan guidelines and possess a first mortgage or a title policy reflecting a first lien on the property. Ms. Davis was informed that the judgement had to be satisfied prior to closing. She refused and maintained that it was unjust. Although Ms. Davis submitted a written explanation for the judgement, the Value Homes Program II loan could not be closed without satisfaction of the judgement. The DCHFA declined the loan for the Value Homes Program II because of Petitioner's refusal to satisfy the loan. There is no evidence of discrimination.

20. In further efforts to get Petitioner in the home, FUNB offered to satisfy the judgement and provide Ms. Davis with 100 percent financing in its Affordable Homes Program at the market rate of 8.25 percent. Ms. Davis refused the offer.

    Atlantic Builders

    
    

21. Atlantic Builders was not involved in the financing of Petitioner's home, and had no direct relationship with the Housing Authority or FUNB.

22. Although they attempted to accommodate Petitioner while she secured satisfactory financing, Atlantic Builders agreed to refund her $500 deposit in the event she was unable to extend the locked rate or lock period to her satisfaction. Ms. Davis agreed

    to release Atlantic Builders from their obligations under the contract in the event the deposit was returned to her.

23. Atlantic Builders worked with Ms. Davis for six months before the contract was ultimately terminated and both parties were released from further claims and/or liabilities.

24. The evidence revealed that Mr. Jack Daniels of Atlantic Builders exhibited unprofessional and rude behavior. However, there is no evidence of discrimination.

    CONCLUSIONS OF LAW

    
    

25. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of these proceedings. Section 760.35, Florida Statutes. Petitioner bears the burden of proof to establish that a violation of the law has occurred.

26. Section 760.23, provides, in pertinent part:

    
    

    Discrimination in the sale or rental of housing and other prohibited practices.

    
    

    1. it is unlawful to refuse to sell or rent after the making of a bona fide offer, to refuse to negotiate for the sale or rental of, or otherwise to make unavailable or deny a dwelling to any person because of race, color, national origin, sex, handicap, familial status, or religion.

       
       

    2. It is unlawful to discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of race, color, national origin, sex, handicap, familial status, or religion.

27. Section 760.25 provides:

    
    

    Discrimination in the financing of housing or in residential real estate transactions.–

    
    

    1. It is unlawful for any bank, building and loan association, insurance company, or other corporation, association, firm, or enterprise the business of which consists in whole or in part of the making of commercial real estate loans to deny a loan or other financial assistance to a person applying for the loan for the purpose of purchasing, constructing, improving, repairing, or maintaining a dwelling, or to discriminate against him or her in the fixing of the amount, interest rate, duration, or other term or condition of such loan or other financial assistance, because of the race, color, national origin, sex, handicap, familial status, or religion of such person or of any person associated with him or her in connection with such loan or other financial assistance or the purposes of such loan or other financial assistance, or because of the race, color, national origin, sex, handicap, familial status, or religion of the present or prospective owners, lessees, tenants, or occupants of the dwelling or dwellings in relation to which such loan or other financial assistance is to be made or given.

       (2)(a) It is unlawful for any person or

       entity whose business includes engaging in residential real estate transactions to discriminate against any person in making available such a transaction, or in the terms or conditions of such a transaction, because of race, color, national origin, sex, handicap, familial status, or religion.

       1. As used in this subsection, the term "residential real estate transaction" means any of the following:

          1. The making or purchasing of loans or providing other financial assistance:

             1. For purchasing, constructing, improving, repairing, or maintaining a dwelling; or

             2. Secured by residential real estate.

          2. The selling, brokering, or appraising of residential real property.

       
       

28. In this case, the Petitioner failed to establish the existence of discrimination. In fact the evidence demonstrates that each of the Respondents made significant efforts toward assisting Ms. Davis.

29. There is no evidence that any of Respondents discriminated against Petitioner regarding the terms and conditions of the sale and financing of a home she sought to purchase.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, and the lack of evidence of discrimination against Petitioner, it is

RECOMMENDED that the Florida Commission on Human Relations enter a final order denying Ms. Davis' petition.

DONE AND ENTERED this 16th day of October, 2000, in Tallahassee, Leon County, Florida.

WILLIAM R. PFEIFFER

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 16th day of October, 2000.

COPIES FURNISHED:

Brenda Davis

5170 Collins Road, Apartment 1808

Jacksonville, Florida 32244

Kimberly Gilyard, Esquire

50 North Laura Street, Suite 3100 Jacksonville, Florida 32202

Steve Rohan, Esquire

117 West Duvall Street, Suite 480 Jacksonville, Florida 32202

Sharon Moultry, Clerk

Florida Commission on Human Relations

325 John Knox Road Building F, Suite 240

Tallahassee, Florida 32303-4149

Dana L. Baird, General Counsel Florida Commission on Human Relations

325 John Knox Road Building F, Suite 240

Tallahassee, Florida 32303-4149

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 00-000736

Orders for Case No: 00-000736