09-000979 Wikindson Philippe vs. Countrywide Home Loans, Inc. Status: Closed Recommended Order on Tuesday, February 2, 2010.

Summary: Petitioner's poor financial decision and Respondent's willingness to encourage that decision do not equate to discrimination.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

WIKINDSON PHILIPPE, )

)

Petitioner, )

)

vs. ) Case No. 09-0979

)

COUNTRYWIDE HOME LOANS, INC., )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice a formal hearing was held in this case

on October 22, 2009, in Kissimmee, Florida, before J. D.

Parrish, a designated Administrative Law Judge of the Division

of Administrative Hearings.

APPEARANCES

For Petitioner: Wikindson Phillippe, pro se

2413 Country Pond Court

Saint Cloud, Florida 34771-8868

For Respondent: Robert C. Graham, Esquire

Akerman Senterfitt

50 North Laura Street

Suite 2500

Jacksonville, Florida 32202

STATEMENT OF THE ISSUE

Whether Respondent, Countrywide Home Loans, Inc.

(Respondent), discriminated against Petitioner, Wikindson

Philippe (Petitioner) in the origination of Petitioner's

mortgage loan on the basis of race and national origin in

violation of the Florida Fair Housing Act, and, if so, what

remedy is available.

PRELIMINARY STATEMENT

On February 19, 2009, the Florida Commission on Human

Relations (FCHR) forwarded a Petition for Relief filed by

Petitioner. Petitioner claimed that Respondent violated the

provisions of the Florida Fair Housing Act (found at Sections

760.20 through 760.37, Florida Statutes (2009)) by fixing the

amount of, the interest rate, and duration of a mortgage loan

(loan number 171654270) to disfavor him because of his race,

color or national origin. Respondent denied the allegations.

The case was promptly scheduled for hearing for April 30,

2009. Thereafter, the case was rescheduled on two occasions.

The hearing was ultimately conducted on October 22, 2009.

At the hearing, Petitioner testified in his own behalf and

offered testimony from Immacula Philippe, his wife; Lydia

Lapotaire, a loan consultant; and William Carlisle, document

custodian for KB Home. Petitioner's Exhibits identified as A-1,

A-2, A-3, A-6, B, C, D, E, H, I, J, and L were admitted into

evidence. Respondent presented testimony from Barry Thompson,

the AVP branch manager for KB Home Mortgage. Respondent's

Exhibits numbered 1-9 were also received in evidence. A

transcript of the proceeding was filed with the Division of

Administrative Hearings on November 6, 2009. The parties were

granted ten days from the filing within which to file their

proposed recommended orders. Both parties timely filed proposed

orders that have been fully considered in the preparation of

this Recommended Order.

FINDINGS OF FACT

1. Petitioner, Wikindson Philippe, is a black male of

Haitian origin. He filed a Housing Discrimination Complaint

against Respondent on November 5, 2008.

2. At all times material to the allegations of the

complaint, Respondent was a lender in partnership with KB Home,

a construction entity developing a residential community

described in the record as Blackstone.

3. On May 20, 2007, Petitioner and his wife ventured forth

to look at homes for purchase. They initially went to a KB Home

development to inquire about homes but were told it was sold

out. The proceeded to a nearby development, Blackstone, and met

with a salesman who Petitioner described as "aggressive." The

salesman showed Petitioner various lots and Petitioner and his

wife were impressed by the community.

4. In order to get "pre-qualified" for a loan to purchase

a home, the KB Home salesman referred the couple to Lydia

Lapotaire, a loan consultant who was located in Respondent's

sales center.

5. Mrs. Lapotaire was employed by Countrywide KB Home

Loans, the preferred lender for KB Home residential properties.

6. Working in tandem, KB Home the builder/developer and

Countrywide KB Home Loans, the preferred lender, sought to

accommodate Petitioner's interest in purchasing the Blackstone

home. Both entities had a financial interest in securing

Petitioner's business.

7. Despite his concerns that he was being inappropriately

pressured to purchase a home, Petitioner signed a contract to

acquire a lot and single-family dwelling to be constructed on

the lot. The purchase agreement recognized that the final

purchase price could be stated in an addendum to the initial

contract. Based upon the purchase agreement Petitioner planned

to acquire a home with a total sales price of $302,490.00.

8. At all times material to the negotiation of the

purchase agreement, Petitioner had advised the salesman and

Mrs. Lapotaire that he could not afford to pay more than

$1,600.00 per month for a mortgage payment. Petitioner was not

concerned regarding the amount of the loan so long as the total

monthly payment did not exceed his cap. Because he relied on

the representations of the salesman and the lender's consultant

and wanted to have the home, Petitioner deposited $5,000.00 down

on the purchase agreement.

9. At all times material to the purchase, both

Mrs. Lapotaire and the salesman assured Petitioner that the

lender would work with him to allow him to acquire the home.

Nevertheless, when Petitioner consulted a friend who had more

experience in the purchase of homes, Petitioner became concerned

that the home he desired could not be acquired for the amount he

could pay. When Petitioner brought these concerns to the

salesman's attention he was advised that he would lose his

deposit if he attempted to cancel the contract. Petitioner

believed that the only way he could recover his deposit money

was to be denied for the loan.

10. To that end, Petitioner and his wife selected upgrades

from the base price of the home. In so doing, Petitioner was

required to make additional deposits. In accordance with the

time lines specified by the builder, Petitioner deposited a

total of $20,000 toward the purchase price of the home.

11. As evidenced by Petitioner's Exhibit B (also admitted

into the record as Respondent's Exhibit 7), Petitioner's loan

application for the Blackstone home was not approved. The

Notice of Action Taken specified several reasons Countrywide KB

Home Loans was unable to approve the loan. Petitioner claimed

he did not receive the notice; it was sent to an incorrect

address. Instead of being addressed to apartment 772, it was

addressed to apartment 72.

12. In the meanwhile, the lender continued to seek

financing for Petitioner's purchase. At that time, Respondent

had an affiliated company called Full Spectrum Lending that

worked as a subprime unit. By going that route it was presumed

the buyer was still actively seeking to purchase the home and

that various lending scenarios could be explored to determine

whether Petitioner might qualify.

13. It is undisputed that Petitioner did not qualify for a

loan under the standard loan scenario.

14. None of the lending procedures used by Respondent,

Countrywide KB Home Loans, or Full Spectrum Lending required

Petitioner to disclose his race or ethnic origin. In fact,

Petitioner did not prove that any of the loan processors or

underwriters knew Petitioner's race or ethnic origin. There is

no evidence that Petitioner's race and ethnic origins were

considered in the decision to approve or not approve the loan.

15. The motivations of Respondent and KB Home were likely

similar. As joint venture partners, they would have wanted

Petitioner to be approved for a loan and to close on it. KB

Home would not likely decline to sell to Petitioner nor want to

refund his deposit. Respondent would not likely profit from not

approving the loan. None of the business reasons for wanting

the loan and sale to be consummated were based upon Petitioner's

race or ethnic origin. In short, financial interests and not a

desire to harm a person of Petitioner's race or ethnic origin

were the key reasons for the seller and lender to work in

concert to achieve the closing on Petitioner's home.

16. After an extended amount of time, Petitioner did close

on the home. He claimed that he was pressured into closing due

to the fear that his deposit would be lost but he nevertheless

signed all of the closing documents necessary to own and finance

the home. It was undoubtedly too expensive for Petitioner.

17. Petitioner has not been able to keep current on his

mortgage obligation. Facing foreclosure, he now asserts that

Respondent's actions were to take advantage of him based upon

his race or ethnic origin. Respondent and KB Home may have

unduly pressured Petitioner to purchase a home he could not

afford, but there is no evidence they did so based upon his race

or ethnic origin.

18. Petitioner is an articulate person. Through out these

proceedings he has stated his position on the issues of the case

in a well-reasoned and cogent manner. He is understandably

disenchanted with the financial results of his home purchase.

He has, however, continued to enjoy the residence and his wife

likes the home.

19. Petitioner's purchase agreement provided, in pertinent

part:

5.5 Failure to Obtain Commitment. Prior to

the Loan Approval Deadline, if Buyer's loan

application is denied or Buyer obtains an

unsatisfactory loan approval (in Buyer's

reasonable discretion) Buyer may cancel this

Agreement with written notice to Seller and

receive a refund of all Deposits.

20. Based upon the Notice of Action Taken (dated July 13,

2007); Petitioner could have canceled the purchase agreement.

He chose to close on the transaction. If Petitioner was not

approved for a loan or if the terms of a loan were unreasonable,

Petitioner did not have to accept the terms of the loan.

Petitioner erroneously presumed he would not receive a refund of

his deposit.

CONCLUSIONS OF LAW

21. The Division of Administrative Hearings has

jurisdiction over the parties to, and the subject matter of,

22. Petitioner bears the burden of proof in this cause to

establish by a preponderance of the evidence that Respondent

committed the violation alleged. See § 760.34(5), Fla. Stat.

(2009). More specifically, Petitioner must establish a prima

facie case that Respondent committed an unlawful act

constituting a violation of Section 760.25, Florida Statutes

(2009).

23. Section 760.25, Florida Statutes (2009), 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.

(b) 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:

a. For purchasing, constructing, improving,

repairing, or maintaining a dwelling; or

b. Secured by residential real estate.

2. The selling, brokering, or appraising of

residential real property.

24. Petitioner presented no direct or statistical evidence

to support a claim of discrimination based upon race or ethnic

origin. The record is devoid of evidence that Petitioner did

not receive a loan comparable to others not within a protected

class. The terms of the loan as to percent of down payment,

term, and interest rate were accepted by Petitioner. There is

no evidence that those items were unreasonable or that others

not within Petitioner's protected class received more favorable

terms. In short, Petitioner made an unfortunate business

decision that Respondent and KB Home were willing to let him

make.

25. In claims of housing discrimination the three-part

test articulated in McDonnell Douglas Corp. v. Green , 411 U.S.

792 (1973) is applicable. See Massaro v. Mainlands Section 1 &

2 Civic Ass'n, Inc. , 3 F.3d 1472, 1476 n.6 (11th Cir. 1993),

cert. denied , 513 U.S. 808 (1994). In essence, the claimant

must first establish that he is a member of a protected class

and that others outside his protected class were treated more

favorably than he in the housing transaction. If the initial

burden is met, the burden then shifts to the charged party to

articulate some legitimate, non-discriminatory reason for its

action. Should the charged party satisfy that burden, the

claimant may then assert and prove that the alleged legitimate

reasons for the actions were merely a pretext for

discrimination. In this case, Petitioner proved that he is a

member of a protected class but little else. Respondent was not

required to prevent Petitioner from making a poor financial

decision. Lenders may be more than willing to loan money a

debtor cannot repay. In this instance the initial denial and

subsequent approval of Petitioner's loan had nothing to do with

Petitioner's race or ethnic origin.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Florida Commission on Human

Relations enter a final order dismissing the complaint of

discrimination filed by Petitioner.

DONE AND ENTERED this 2nd day of February, 2010, in

Tallahassee, Leon County, Florida.

S

J. D. PARRISH

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 2nd day of February, 2010.

COPIES FURNISHED :

Larry Kranert, General Counsel

Florida Commission on Human Relations

2009 Apalachee Parkway, Suite 100

Tallahassee, Florida 32301

Denise Crawford, Agency Clerk

Florida Commission on Human Relations

2009 Apalachee Parkway, Suite 100

Tallahassee, Florida 32301

Robert C. Graham, Esquire

Akerman Senterfitt

50 North Laura Street, Suite 2500

Jacksonville, Florida 32202

Wikindson Philippe

2413 Country Pond Court

St. Cloud, Florida 34771-8868

COPY FURNISHED BY CERTIFIED MAIL

Sylvia Bakrevski

Country Wide Home Loans

5220 Las Virgenes Road

Calabasas, California 91302

(Certification No. 91 7108 2133 3935 7995 2966)

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.