UNITED STATES OF AMERICA,
     Plaintiff,

v.

THE HUNTINGTON MORTGAGE COMPANY,
     Defendant.

___________________________________

COMPLAINT

The United States of America alleges:

1. This action is brought by the United States to enforce the provisions of Title VIII of the Civil Rights Act of 1968 (the Fair Housing Act), as amended by the Fair Housing Amendments Act of 1988, 42 U.S.C. §§ 3601-3619, and the Equal Credit Opportunity Act, 15 U.S.C. §§ 1691-1691f.

2. This Court has jurisdiction of this action pursuant to 28 U.S.C. § 1345, 42 U.S.C. § 3614, and 15 U.S.C. § 169le(h).

3. Defendant The Huntington Mortgage Company (hereinafter "Huntington") is a mortgage company conducting business in the Northern District of Ohio and elsewhere. Huntington's principal place of business is located in Columbus, Ohio.

4. Huntington's business includes engaging in residential real estate-related transactions and regularly extending credit to persons including origination, processing, underwriting, servicing, and sales on the secondary market of residential mortgage loans.

5. Huntington is subject to federal laws governing fair lending, including the Fair Housing Act, the Equal Credit opportunity Act, and the Community Reinvestment Act of 1977, 12 U.S.C. §§ 2901-2906.

6. Prior to 1994, Huntington set, on a daily basis, minimum prices for home mortgage loans including interest rates and loan origination fees or points. Using these minimum prices, mortgage loan officers employed by Huntington (hereinafter "originators") determined the interest rate and points they would seek to charge applicants for home mortgage credit.

7. Prior to 1994, Huntington gave mortgage loan originators complete discretion to increase prices, i.e., points and interest rates, charged to borrowers over the minimum base prices set by Huntington. Amounts obtained by the originators in excess of the base prices (hereinafter "overages") were shared equally between the originator and Huntington.

8. In June of 1993, the office of the Comptroller of the Currency (OCC) conducted a fair lending examination of Huntington. During this examination, OCC examiners reviewed the overages charged on home mortgage loans originated by Huntington during the first six months of 1993. This analysis revealed significant disparities between the amount of overages charged minority and non-minority borrowers in Huntington's Cleveland office.

9. The OCC conducted an additional analysis of all mortgage loans originated by Huntington during a two-year period ending September 30, 1993, including a detailed file review. This analysis revealed that the Cleveland office of Huntington charged whites overages averaging 0.07 percentage points compared to an average overage of 0.83 percentage points for minority borrowers. Thus, minority borrowers paid overages at a rate ten times greater than white borrowers in the Cleveland market during the two-year period examined by the OCC (0.07% v. 0.83%).

10. OCC's June 1993 fair lending examination found Huntington's supervision of fair lending compliance to be ineffective; its loan origination policies, internal controls, and training to be inadequate; and the resources allocated by Huntington to ensure consumer compliance insufficient. The OCC concluded that Huntington's compliance with fair lending law and regulation was unsatisfactory. Huntington has corrected the deficiencies identified by the OCC, as confirmed by a fair lending examination conducted in August of 1994.

11. Pursuant to 15 U.S.C. § 1691e(g), the OCC referred the matter to the Attorney General on August 5, 1994 for appropriate enforcement action, following the OCC's determination that Huntington may have engaged in a pattern or practice of discrimination in violation of the Fair Housing Act and the Equal Credit opportunity Act.

12. Upon receipt of the OCC referral, the Attorney General initiated a follow-up investigation and analysis that included a review of the applications and loan files of all African Americans who applied for home mortgage credit with the Cleveland office of Huntington from October 1991 to September 1993. This analysis revealed that the average overage during this period for all African-American borrowers was 0.86 percentage points compared to an average overage of 0.07 percentage points for whites as determined by the OCC.

13. Prior to 1994, Huntington promulgated no standards and provided no guidance to mortgage loan originators concerning the appropriate factors to considerin determining whether, and in what amount, to seek overages; and did not review, monitor, examine, or analyze the overages charged African-American applicants compared to white applicants to ensure that originators were not charging higher overages to African Americans without adequate race-neutral justification.

14. The disparities in overage amounts charged African-American mortgage loan applicants and white mortgage loan applicants as discussed in Paragraphs 9 and 12 did not occur by chance and cannot be explained by differences in the relative qualifications of white applicants and African-American applicants for mortgage loans, or by other nonracial factors.

15. Huntington's policies and practices as alleged herein constitute:
    1. Discrimination on the basis of race in making available residential real estate-related transactions in violation of Section 805 of the Fair Housing Act, 42 U.S.C. § 3605(a);

    2. Discrimination on the basis of race in the terms, conditions, or privileges of the provision of services or facilities in connection with the sale or rental of dwellings, in violation of Section 804(b) of the Fair Housing Act, 42 U.S.C. § 3604(b); and
    3. Discrimination on the basis of race against applicants with respect to credit transactions, in violation of the Equal Credit Opportunity Act, 15 U.S.C. § 1691(a)(1).

16. Huntington's policies and practices as alleged herein constitute:
    1. A pattern or practice of resistance to the full enjoyment of rights secured by the Fair Housing Act, as amended, 42 U.S.C. §§ 3601-3619, and the Equal Credit opportunity Act, 15 U.S.C. §§ 1691-1691f; and

    2. A denial of right's granted by the Fair Housing Act, as amended, to a group of persons that raises an issue of general public importance.

17. Persons who have been victims of Huntington's discriminatory policies and practices as alleged herein are aggrieved persons or applicants as referenced or defined under the Fair Housing Act and the Equal Credit Opportunity Act and have suffered damages as a result of Huntington's conduct.

WHEREFORE, the United States prays that the court enter an ORDER that:

1. Declares that the policies and practices of Huntington constitute a violation of Title VIII of the Civil Rights Act of 1968, as amended by the Fair Housing Amendments Act of 1988, 42 U.S.C. §§ 3601-3619, and the Equal Credit Opportunity Act, 15 U.S.C. §§ 1691-1691f;

2. Enjoins Huntington, its employees, agents, and all other persons in active concert or participation with them, from discriminating on account of race in any aspect of their mortgage lending activities;

3. Requires Huntington to develop and submit to the Court for its approval a detailed plan that: (a) remedies the vestiges of Huntington's discriminatory policies and practices; and (b) ensures that future African-American applicants are treated in a nondiscriminatory manner that does not differ from the treatment afforded to white applicants; and

4. Awards such damages as would fully compensate the victims of Huntington's discriminatory policies and practices for the injuries caused by Huntington.

The United States further prays for such additional relief as the interests of justice may require.

JANET RENO
Attorney General

DEVAL L. PATRICK
Assistant Attorney General

PAUL F. HANCOCK
Chief, Housing and Civil Enforcement Section

ISABELLE M. THABAULT
WILLIAM B. SENHAUSER
Attorneys, Housing and Civil Enforcement Section
U.S. Department of Justice
P.O. Box 65998
Washington, D.C. 20035-5998
(202) 514-0809

EMILY M. SWEENEY
United States Attorney

Annette G. Butler
Reg. #0040038
Assistant U.S. Attorney
600 Superior Ave., East
1800 Bank One Center
Cleveland, Ohio 44114
(216) 622-3718