The U.S. Department of Justice has filed a lawsuit on behalf of a fair-housing organization, charging a RE/MAX brokerage and an affiliated agent in northern Illinois with housing discrimination.

The lawsuit, filed July 18 in U.S. District Court in the Northern District of Illinois, charges that testing conducted by the National Fair Housing Alliance revealed discrimination based on race and national origin.

The U.S. Department of Justice has filed a lawsuit on behalf of a fair-housing organization, charging a RE/MAX brokerage and an affiliated agent in northern Illinois with housing discrimination.

The lawsuit, filed July 18 in U.S. District Court in the Northern District of Illinois, charges that testing conducted by the National Fair Housing Alliance revealed discrimination based on race and national origin.

Officials at RE/MAX East-West, which is based in Elmhurst, Ill., did not respond to Inman News requests for comment.

The National Fair Housing Alliance conducted an investigation of the sales practices of RE/MAX East-West from June 2004 through February 2005 using undercover "testers" who posed as home buyers. The testers were of different races and origins. The results of this investigation led to an NFHA complaint, U.S. Department of Housing and Urban Development investigation and the federal lawsuit.

The organization has also conducted similar tests at several other brokerage companies (see Inman News article).

John Wassinger, who bought the RE/MAX East-West business in 2006, this week told a local newspaper, the Daily Herald, "If there is anything that is a mantra in this industry, it is that everyone is to be treated fairly and blindly." Racial steering "isn’t tolerated," he said.

John DeJohn, the agent who is charged in the Justice Department lawsuit, left RE/MAX East-West and now works for another real estate company in northern Illinois, according to the lawsuit.

DeJohn in September 2004 reportedly steered a Hispanic tester, acting as a home buyer, toward areas that are predominantly African-American and Hispanic, the lawsuit alleges, and told the tester that one of the homes "’might be good for you,’ or words to that effect,’ " the lawsuit states.

DeJohn allegedly did not show or offer to show the tester any additional homes, and told the tester that she could not afford homes in several predominantly white areas, "even though in some cases the median home value in those areas was within the tester’s price range," according to the lawsuit. Also, the lawsuit charges that DeJohn did not make any follow-up phone calls to that tester.

Later that month, a white tester made an appointment to view homes with DeJohn, who allegedly encouraged the tester to "research online to find out ‘what the minority population is’ of neighborhoods in the Chicago region, or words to that effect."

DeJohn allegedly steered the white tester toward predominantly white areas and away from predominantly African-American and Hispanic areas, the lawsuit states, and showed the white tester nine homes — seven in predominantly white areas.

He allegedly told the white tester, "’I don’t care if you are a bigot. If we go to an area and you don’t like it, just let me know. I can’t be a bigot but you can be one,’ or words to that effect."

And while DeJohn allegedly told the Hispanic tester that one home "might be good for you," he allegedly referred to that home and another home as "dumps" and "repos" when speaking to the white tester. And the lawsuit charges that DeJohn made multiple follow-up calls to the white tester.

NFHA filed a complaint with HUD on Aug. 22, 2005, and amended the complaint on April 7, 2008. HUD officials "determined that reasonable cause exists to believe that illegal discriminatory housing practices had occurred," the lawsuit states, and on June 9 the housing agency issued a charge of discrimination in violation of the Fair Housing Act and later authorized a civil action.

The lawsuit seeks to enjoin the company and its agents and employees from engaging in discrimination on the basis of race and national origin related to home sales, and also seeks monetary damages to NFHA.

Shanna L. Smith, president and CEO of the National Fair Housing Alliance, which is based in Chicago, said in a statement, "We are pleased with HUD’s decision to issue a charge … and we hope that this will send a clear message to the housing industry that real estate agents and companies must be held accountable to the law."

NFHA reported this week that its 12-city investigation turned up an 87 percent rate of alleged racial steering and an almost 20 percent rate of alleged housing denial for African-Americans and Latinos.

Inman News has reported on several other complaints filed by NFHA against real estate companies in metro Atlanta; Detroit; Chicago; Fairhope, Ala.; Westchester, N.Y.; and Long Island. Among the companies named: Coldwell Banker The Condo Store, Coldwell Banker Marietta, RE/MAX Buckhead, Coldwell Banker Joe T. Lane Jonesboro, Detroit Century 21 Town & Country, Coldwell Banker Gold Coast, RE/MAX East-West, Manders & Company Real Estate, Peter J. Riolo Real Estate and Julia Stevens Realty.

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