Man Accused of Racial Bias in House Sale

By DIONNE WALKER Associated Press Writer

(AP) - RICHMOND, Va.-The modest brick house, with its yard full of wilting tulips and rusted old cars, isn't a candidate for the pages of Better Homes and Gardens.

But on a spring day in 2002, it was just what Nealie Pitts had in mind. She approached the owner, Rufus T. Matthews, and asked the price.

According to court documents, Matthews said the house was selling for $83,000 - but that a deed restriction meant only whites were eligible to buy it.

"I was hurt and angry, like he had slapped me in the face," Pitts, who is black, said in an e-mail.

Nearly three years later, the Virginia Office of the Attorney General said it will soon take Matthews to court for the alleged fair housing law violation.

It's a bittersweet victory for fair housing proponents, who wonder how many other people are turned away by racially restrictive deed covenants.

"We very rarely encounter anybody who believes they can be enforced," said Connie Chamberlin, president of Housing Opportunities Made Equal. "(But) we are aware they're certainly out there."

In milder forms, covenants can be used to control things like the color homeowners can paint their houses.

But in the Jim Crow South, they were often used to keep neighborhoods white. Racially restrictive covenants were ruled illegal by the Supreme Court in 1948.

"Many people don't even know they're in their deeds," Chamberlin said, adding would-be home buyers can ask to have the racist language removed. "That can't be used as a reason to stop a sale."

According to court documents, Matthews told Pitts his house in suburban Richmond was "not for colored. We decided we are going to keep this area right here all white."

The next day she contacted HOME, which sent out a black test buyer.

"Precisely the same thing happened," Chamberlin said. "We have it on tape."

On Thursday, Matthews told The Associated Press that he would sell his home only to a white buyer. But he denied the house was for sale, saying a sale sign he had was for items in his yard. "The house has never been for sale," he said.

Matthews is accused of violating the Virginia Fair Housing Law. The same code says officials can attempt an out-of-court settlement in cases where the law has been violated.

At an April 13 meeting, the Virginia Fair Housing Board rejected a settlement offer. Board Chairman David Rubinstein declined to detail why it refused the proposal from the attorney general's office.

But Thomas Wolf, an attorney representing Pitts, said the offer would have required Matthews take two hours of class on fair housing law, at taxpayer expense.

"That is not a serious settlement proposal given the facts of the case," Wolf said. "Were they planning to pass out Happy Meals with little Confederate flags?"

Emily Lucier, a spokeswoman for Attorney General Judith Williams Jagdmann, could not explain how the proposal was formulated, but said settlement is not unheard of in discrimination cases.

Pitts is seeking $100,000 in damages in a separate case against Matthews. Lucier said because Pitts has gotten her own lawyer, the office cannot legally seek monetary damages in the civil matter.

Instead, she said, the office will continue pressing for injunctive relief and education. A court date has not been set.

2005-04-22T06:05:22Z

http://news.findlaw.com/ap/o/632/04-22-2005/e2ac001de5a14960.html
posted by Las Vegas at 11:05 AM

Maryland Bill Attacks Scams In Foreclosure Consulting (washingtonpost.com)
By Sandra Fleishman
Washington Post Staff Writer

Saturday, April 9, 2005; Page E01

Maryland's General Assembly appears close to passing legislation that supporters say would be one of the toughest responses in the nation to con artists who promise to rescue desperate homeowners from foreclosure but end up getting title to the house and turning the owners into tenants.

The House this week passed a version in a 130 to 0 vote. The Senate passed a similar version 47 to 0 on March 22. The sponsors were optimistic that the versions could be reconciled and a bill sent to the governor over the weekend; the session ends Monday.

Gov. Robert L. Ehrlich Jr. (R) has taken no position on the bill, but a state regulatory agency has said some legislation is needed. The Maryland Bankers Association and the Maryland Association of Realtors backed the House proposal after amendments exempted those with a legitimate interest in foreclosure sales from most provisions.

The bill "places Maryland among only a few states that have quickly responded to the unconscionable and fraudulent activity of these so-called foreclosure consultants," said Diane Cipollone of the Community Law Center in Baltimore. "The elderly and minorities who have equity in their homes are targeted [by those who advertise themselves as foreclosure consultants] and end up as tenants in their own homes by this deed theft."

The bill was offered by Sen. Brian E. Frosh (D-Montgomery) and Del. Doyle L. Niemann (D-Prince George's). Niemann said he introduced the measure after he ran into the issue in his day job as an assistant state's attorney. He heard an increasing number of complaints from Washington area homeowners who claimed to have been tricked out of their houses by those who said they would help avoid foreclosure. The homeowners either knowingly or unknowingly sign over their titles, thinking they will be able to repurchase later, but then learn that they cannot afford the new price and that they have sold their homes for the back payments owed and not the market value of the property.

The state's attorney's office in Prince George's County is investigating a half-dozen such complaints, Niemann said. State regulators at the Department of Labor, Licensing and Regulation have also issued warnings about scams.

Reports of similar problems have mushroomed across the country in the past two years, according to consumer advocates and regulators, as hundreds of thousands of homeowners face foreclosure even though home values have skyrocketed.

"What you're seeing is the return of an old scam," said Ira Rheingold, executive director of the National Association of Consumer Advocates. "It happened a lot in the '70s and then seems to have dissipated for a while. Now it's something we're seeing everywhere."

"People are so desperate to keep their homes -- even though they're in foreclosure and they know instinctively that they should sell their homes -- that they get conned by these people," said Minnesota Attorney General Mike Hatch (D), who lobbied for the law in his state last year.

The Maryland bill is based in part on the Minnesota law, but it goes much further, Niemann said.

If a consultant "promises to do certain things, more than just advice, we require that those contracts be in writing and to specify exactly what the consultant will do and what he will charge," Niemann said. "And if there is a sale involved, that has to be specified as well."

If the consultant promises to let the homeowner repurchase the property, that must also be in writing, with the purchase price spelled out.

If the repurchase agreement falls apart within 18 months, whoever buys the house must give the homeowner 82 percent of the equity in the house, minus their expenses, Niemann said. That language is the heart of the Minnesota bill.

"This is going to make a huge difference," Niemann said. "As people become more aware of it, it's going to put out of business all of the people that lie, and there's a lot of them."
posted by Las Vegas at 7:52 AM