The National Fair Housing Alliance (NFHA) and four of its member organizations have announced a joint federal housing discrimination complaint with the U.S. Department of Housing & Urban Development (HUD) against U.S. Bancorp and U.S. Bank NA. The complaint is the result of an undercover investigation of U.S. Bank’s properties that found that its foreclosed properties in White areas are much better-maintained and marketed than its properties in African-American and Latino neighborhoods.
The complaint looked at 177 foreclosed properties owned by U.S. Bank where the bank is accused of engaging in a systemic practice of maintaining and marketing its foreclosed, real estate-owned (REO) properties in a state of disrepair in communities of color, while maintaining and marketing REO properties in predominantly White communities in a far superior manner. The U.S. Bank investigation evaluated REO properties in the seven metropolitan areas of Atlanta, Ga.; Chicago, Ill.; Baltimore, Md.; Dayton, Ohio; Miami/Fort Lauderdale, Fla.; Oakland/Richmond/Concord, Calif.; and Washington, D.C.
“Our findings underscore the obvious: Properties that are poorly maintained not only lose value, but have a higher likelihood of selling to an investor, rather than to a family,” said Shanna L. Smith, NFHA president and CEO. “U.S. Bank is making it harder for the market to come back in communities of color.”
The National Fair Housing Alliance in Washington, D.C., and four of its member organizations—the Miami Valley Fair Housing Center in Dayton, Ohio; Housing Opportunities Project for Excellence in Miami, Fla.; Metro Fair Housing Services in Atlanta, Ga.; and HOPE Fair Housing Center of Wheaton, Ill.—evaluated the maintenance and marketing of REO properties for the existence of 39 different types of maintenance or marketing deficiencies, such as broken windows and doors, water damage, overgrown lawns, no “for sale” sign, trash on the property, and other deficits.
“We are simply asking U.S. Bank to do routine maintenance and marketing of their REO properties in Dayton,” said Jim McCarthy, president and chief executive officer of the Miami Valley Fair Housing Center in Dayton, Ohio. “The neglect of these properties by U.S. Bank leads to the deterioration of neighborhoods, the loss of property values, and the decline of our tax base.”
Nationally, and in each of the seven metropolitan areas, U.S. Bank’s REO properties in communities of color were far more likely to have several deficiencies in maintenance or marketing than REO properties in predominantly White communities.
“Without routine maintenance, these properties have become an eyesore for Atlanta’s neighborhoods and should be an embarrassment for U.S. Bank,” said Gail Williams, executive director of Metro Fair Housing Services Inc. in Atlanta, Ga. “Atlanta’s neighborhoods are being victimized over and over again by the Big Banks; first with predatory loans, then denying loan modifications, through the foreclosure crisis, and now with poorly-maintained REO properties.”
Without a “For Sale” sign, for example, potential homebuyers driving in the neighborhood would simply not know the property is available. Also, if there is storm damage or unauthorized occupants, neighbors have no one to call. With a "For Sale" sign, people know whom to contact to visit the home or neighbors can call a real estate agent to report problems. In Dayton, Ohio, 94 percent of all U.S. Bank properties in communities of color were missing a "For Sale" sign, while in Chicago and Oakland/Bay Area, 68 percent and 64 percent, of all properties in communities of color had the same deficiency.
“A 'For Sale' sign is immediately recognized as a marketing tool. When you see a professional sign, you know someone is promoting the home,” said Smith.