Wells Fargo and U.S. Bank have let foreclosed homes in black and Latino neighborhoods lapse into disrepair, while bank-owned homes in mainly white neighborhoods are better cared-for, according to housing advocates.

The National Fair Housing Alliance, a non-profit group, brought a formal complaint to the Department of Housing and Urban Development last week alleging that Wells Fargo violated the Fair Housing Act by failing to keep up homes in minority neighborhoods. Today, the group announced they are also filing a second complaint, against U.S. Bank.

Earlier this month, the group released a survey, which was funded in part by HUD, of more than 1,000 unoccupied, foreclosed homes across the country owned by unspecified banks. When a house is foreclosed upon, the bank that takes it over is responsible for maintaining it. The report cites evidence 2014 photos and interviews with neighbors 2014 showing houses becoming dilapidated under banks’ watch.

The complaint against Wells Fargo claims that among more than 200 homes surveyed, those in black and Latino neighborhoods were much more likely to have yards filled with trash, broken doors, damaged windows, and other signs of neglect. Fewer homes in those neighborhoods had “for sale” signs visible. For example, 68 out of 149 homes in black and Latino neighborhoods had damaged roofs, compared to only nine out of 69 properties in white neighborhoods.

The study looked at homes owned by Wells Fargo in Washington D.C., Baltimore, Philadelphia, Dallas, Miami, Atlanta, Oakland, Calif., and Dayton, Ohio.

A spokeswoman for Wells Fargo said in an emailed statement that the bank “conducts all lending-related activities in a fair and consistent manner without regard to race: this includes maintenance and marketing standards for all foreclosed properties for which we are responsible.” She also said that the bank has a dedicated department that maintains and markets foreclosed properties from loans that are within its portfolio. Since the complaint did not identify specific properties, she said, Wells Fargo has not been able to investigate its claims.

U.S. Bank did not immediately respond to our request for comment, and a spokesman for HUD declined to comment on the complaint.

The report also pointed out that there were simply fewer bank-owned foreclosed properties in white neighborhoods than in minority neighborhoods, an indication, it says, of the fact that African-American and Latino communities were disproportionately affected by the subprime mortgage crisis.

Numerous studies have shown that lenders targeted minorities for the riskiest loans, and often charged them more than similarly qualified white borrowers. A report from the Center for Responsible Lending found that black and Latino homeowners were twice as likely to lose their homes to foreclosure than white homeowners.

(The center was started with support from the Sandler Foundation, which is also the major funder of ProPublica.) In the biggest settlement to come out of the government post-bubble investigation of discriminatory lending practices, lender Countrywide (now owned by Bank of America) agreed to pay $335 million to settle a Department of Justice suit.

Nationally, banks or investors own roughly half a million foreclosed homes, and the Federal Reserve estimates this will increase to 1 million this year. Some banks and investors are looking to unload the properties en masse. Fannie Mae and Freddie Mac, who own about half the properties, are piloting a program for bulk sales of their foreclosed properties that requires they be offered as rentals. Other lenders are turning into landlords themselves.

by Cora Currier ProPublica, April 16, 2012, 5:10 p.m.

The article Big Banks Slack on Maintaining Foreclosed Homes in Minority Areas, Complaint Charges appeared first on The Toonari Post - News, Powered by the People!.

On April 4, the National Fair Housing Alliance (NFHA) and four of its local member organizations announced the results of an undercover investigation into the ways the nation’s financial institutions are failing to maintain and market Real Estate Owned (REO) properties in African-American and Latino neighborhoods.

The investigation of REO properties in nine major U.S. cities found striking incidents of discrimination in the care and maintenance of properties, with foreclosed properties in White areas being much better maintained and marketed than those in neighborhoods of color. 

A report of the investigation, “The Banks Are Back, Our Neighborhoods Are Not: Discrimination in the Maintenance and Marketing of REO Properties,” was released on Wednesday, April 4.  It details the results of the evaluation of more than 1,000 REO properties located in and around Atlanta, GA; Baltimore, MD; Dallas, TX; Dayton, OH; Miami/Fort Lauderdale, FL; Oakland/Richmond/Concord, CA; Philadelphia, PA; Phoenix, AZ; and Washington, DC.

“This report offers evidence that banks responsible for peddling unsustainable loans to communities of color and triggering our current foreclosure crisis are continuing to damage those communities by failing to properly maintain and market the properties they own,” said Shanna L. Smith, President and CEO of the National Fair Housing Alliance.

“This is an investigation – not a study –- that will culminate in the filing of administrative complaints with HUD and/or lawsuits in federal district court,” continued Smith.  “The first complaint will be filed shortly.”

The National Fair Housing Alliance in Washington, D.C., and four of its member organizations – the Miami Valley Fair Housing Center in Dayton, OH; Housing Opportunities Project for Excellence in Miami, FL; Metro Fair Housing Services in Atlanta, GA; and North Texas Fair Housing Center in Dallas, TX – evaluated the maintenance and marketing of REO properties on a 100-point scale, subtracting points for broken windows and doors, water damage, overgrown lawns, no “for sale” sign, trash on the property, and other deficits.

The evaluations took into account 39 different aspects of the maintenance and marketing of each property.  Overall, REO properties in communities of color were 42 percent more likely to have more than 15 maintenance problems than properties in White neighborhoods.

Some trends the investigation revealed include:

• REO properties in communities of color were 82 percent more likely than REO properties in White communities to have broken or boarded windows;
• REO properties in White neighborhoods were 32 percent more likely to be marketed with the proper signage than African-American neighborhoods and 38 percent more likely than in Latino neighborhoods; and
• Newer homes generally scored higher than older homes, but racial and ethnic disparities persisted with non-structural factors such as curb appeal and signage.

“We hope that banks will heed the information in this report and take immediate action to correct the disparate treatment we have found,” continued Smith.  “The proper maintenance and marketing of REO properties is a key factor in the sale of homes to families rather than to investors.”  The report contains details specific to each city and gives extensive recommendations on how to fix these problems.

The Fair Housing Act makes it illegal to discriminate based on race, color, national origin, religion, sex, disability or familial status, as well as the race or national origin of residents of a neighborhood.  This law applies to housing and housing-related activities, which include the maintenance, appraisal, listing, marketing and selling of homes.

To read the full report, please go to www.nationalfairhousing.org.

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