SETTLEMENT AGREEMENT BETWEEN THE UNITED STATES
AND WASHINGTON MUTUAL BANK
This matter came to the attention of the United States Department of Justice in October 2004, when the United States Department of Housing and Urban Development (HUD) referred the case of Mathis v. Washington Mutual Bank, F.A. (HUD Case No. 10-04-0118-8) to the Department of Justice for enforcement proceedings pursuant to 42 U.S.C. § 3614(b). The HUD referral states that the circumstances may warrant enforcement proceedings against Washington Mutual Bank f/k/a Washington Mutual Bank, FA, (hereinafter referred to as "respondent") for breach of a 2002 Conciliation Agreement.
On February 27, 2004, David and Brenda Mathis (hereinafter referred to as "complainants") filed with HUD a complaint against respondent. The complaint alleged that the respondent had breached a Conciliation Agreement it entered into to resolve an earlier administrative complaint filed with HUD, by failing to remove the negative credit related to the Washington Mutual loan from the complainants’ credit reports by January 9, 2003.
The earlier HUD complaint was filed on February 5, 2001, by the complainants. It alleged that Bank United, which later merged with the respondent, had discriminated against complainants on the basis of their race in violation of 42 U.S.C. § §3604 and 3605, by attempting to foreclose on the respondent’s Federal Housing Administration mortgage loan, although the complainants had applied for and been approved for a Loss Mitigation Program. That 2001 HUD complaint was resolved by a Conciliation Agreement, which became effective on October 11, 2002, when it was signed by HUD’s Director of the Seattle HUB. The Conciliation Agreement required respondent to allow the Complainants to do a loan modification to bring the delinquency current" and "to remove the negative credit from the credit report dating back to May of 2000." The Conciliation Agreement also required the respondent to provide to HUD within 90 days of the effective date of the Conciliation Agreement verification that relief for the Complainants had been executed.
After the filing of the instant HUD complaint in 2004, HUD conducted an investigation. HUD’s investigation found that in accordance with the Conciliation Agreement, the respondent and the complainants entered into a Loan Modification Agreement on November 1, 2002 (the modified loan). HUD also found that respondent submitted a request for the negative credit to be removed on January 9, 2003, which was 90 days after the effective date of the Conciliation Agreement. However, the negative credit was not removed from the Mathises’s credit report until late 2003, after the Mathises complained but before they filed the instant complaint.
HUD referred the case to the Department of Justice in October 2004. The Department of Justice has learned that the complainants have not paid their monthly mortgage payment since March 2003, that respondent has not taken action or posted negative credit because of these missed payments, and that complainants intend to sell their house by September 1, 2006. In sum, the credit reporting agency has removed the negative credit from the Bank United loan and the terms of the original Conciliation Agreement were fulfilled, albeit belatedly. Respondent has also agreed to take all of the steps outlined below to resolve this matter, including forgiving accrued and unpaid interest of $10,000 and any unpaid late charges or other fees on the complainants’ modified loan, upon the signing of a release from the complainants.
The United States and Washington Mutual Bank also have agreed that the controversy should be resolved without litigation. Therefore, without adjudication of complainants’ allegations, the United States and respondent enter into this Settlement Agreement.
NOW, THEREFORE, the United States and respondent agree as follows:
1. Respondent agrees not to retaliate against or interfere with the complainants on account of their exercise of any right under the Fair Housing Act (Act) or on account of their having aided or encouraged any other person in the exercise or enjoyment of their rights under the Act.
2. Respondent, its agents, employees, and all persons in active concert or participation with it, agree to refrain until September 1, 2006, from taking any adverse action against the complainants related to the current modified loan, including foreclosing on the complainants’ loan and reporting negative credit about the complainants to any credit reporting agency, even if the complainants continue not to make their monthly mortgage payment.
3. Until September 1, 2006, or until complainants sell their home or refinance the current modified loan, whichever comes first, respondent shall continue to make all tax and insurance payments as they become due on the complainants’ property at 6659 E. Sonia, Tacoma, Washington, 98404.
4. Respondent agrees to forgive accrued and unpaid interest of $10,000 and waive any unpaid late charges and other fees on the complainants’ modified loan, if the complainants sign and return to the United States the release, which is attached as Attachment A. The United States agrees to notify complainants by sending this Settlement Agreement to them by overnight carrier within 3 days of the its effective date. The complainants must return to the United States via overnight carrier the signed release within 30 days of the effective date of this Settlement Agreement. If the complainants timely sign and return the release, respondent will effect the forgiveness by reducing the amount of interest due on the modified loan by $10,000 when the loan is paid off, the loan payments are brought current, or the loan is foreclosed.
5. The United States and Washington Mutual Bank agree that this Settlement Agreement will become effective as of the date it is signed by the United States Department of Justice.
It is so agreed and stipulated by the parties as evidenced by the signatures of respective counsel below.
For the United States:
WAN J. KIM
Assistant Attorney General
Civil Rights Division
STEVEN H. ROSENBAUM
Housing and Civil
DONNA M. MURPHY
WILLIAM J. CONDON, JR.
Housing and Civil Enforcement Section
Civil Rights Division
U.S. Department of Justice
950 Pennsylvania Avenue, N.W.-G. Street
Washington, DC 20530
Tel.: (202) 353-9707
Fax: (202) 514-1116
For Defendant Washington Mutual Bank:
Dated this ____ day of _______________, 2006
Washington Mutual Bank
1201 Third Avenue
Seattle, WA 98101
In consideration of and contingent upon Washington Mutual Bank (respondent) reducing the amount of interest due on the modified loan by $10,000 should the loan be paid off, the loan payments be brought current, or the loan foreclosed and waiving any late charges and other fees pursuant to the Settlement Agreement between the United States and respondent related to the U.S. Department of Housing and Urban Development’s (HUD) investigation of Mathis v. Washington Mutual, Case No. 10-04-0118-8, we hereby release and forever discharge respondent from any and all liability for any legal or equitable claims we may have against them arising out of the issues alleged in our administrative complaint filed with HUD on February 27, 2004. We fully acknowledge and agree that this release of respondent shall be binding on our heirs, representatives, executors, successors, administrators, and assigns. We hereby acknowledge that we have read and understand this release and have executed it voluntarily and with full knowledge of its legal consequences.
|David Mathis |
| Brenda Mathis|