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BofA Accused of Not Maintaining REOs in Minority Neighborhoods

NationalMortgageProfessional.com
Sep 26, 2013

On the one-year anniversary of their initial complaint with the U.S. Department of Housing and Urban Development (HUD), the National Fair Housing Alliance and four of its member organizations, the Denver Metro Fair Housing Center, Metro Fair Housing Services Inc. (Atlanta), Miami Valley Fair Housing Center (Dayton), and Housing Opportunities Project for Excellence, Inc. (Miami), announced that they have amended their federal housing complaint, alleging that Bank of America continues to maintain and market foreclosed homes in white neighborhoods in a much better manner than in African-American and Latino neighborhoods. Failing to maintain and market homes because of the racial or ethnic composition of the neighborhood can violate the federal Fair Housing Act. The new cities added to the complaint are Memphis, Denver, Las Vegas, Tucson, and Philadelphia. The organizations have also provided HUD with new evidence in Atlanta, Dayton, Miami, and Prince George’s County in the Washington, D.C. area supporting their allegations of a continuing violation by Bank of America. The complaint now brings the total to 18 metropolitan areas covering more than 30 municipalities where Bank of America is alleged to have discriminated in its maintenance and marketing of its bank-owned homes, also known as real estate-owned (REO) properties. The complaint, which now includes 621 properties, was filed with the U.S. Department of Housing & Urban Development (HUD). The five fair housing organizations evaluated the maintenance and marketing of REO properties for 39 different types of maintenance or marketing deficiencies, including broken windows and doors, water damage, overgrown lawns, no “for sale” sign, trash on the property, and other problems. “Every day Bank of America continues to neglect homes it owns in communities of color and prices decline, allowing investors to snatch up these foreclosures, turning communities into neighborhoods of absentee landlords, ” said Shanna L. Smith, president and CEO of the National Fair Housing Alliance. “Bank of America is the second largest commercial bank in the United States and it has been on notice of these problems since 2009. And yet, Bank of America chooses to ignore its responsibility to maintain and market foreclosures regardless of the racial or ethnic makeup of the community.” In the 18 metropolitan areas where NFHA and its partners investigated Bank of America REOs: ►REO properties in communities of color were 2 times more likely than REO properties in White communities to have more than 10 maintenance or marketing problems; ►REO properties in communities of color were 4.5 times more likely than REO properties in White communities to have more than 15 maintenance or marketing problems; and ►REO properties in White communities were 3 times more likely than REO properties in communities of color to have fewer than 5 maintenance or marketing problems. NFHA and its member agencies are represented by Janell Byrd-Chichester and colleagues at Mehri & Skalet PLLC, a Washington, DC based law firm. It is common practice when selling a home to place a “For Sale” sign in the front yard. Without a sign on a property, potential homebuyers do not even know the property is available. Also, without a sign, neighbors would not know whom to call to report unauthorized occupants or storm damage. In Memphis, all (100 percent) of Bank of America REO properties in communities of color were missing a “for sale” sign, as were 93 percent in Tucson, and 78 percent in Philadelphia. Trash on a property is not only an eyesore for neighbors, but it makes a home unappealing to buyers, and can be a potential health and safety hazard. Trash attracts rats, mice, stray animals and tells vandals the home is vacant and neglected. Regular maintenance would correct this problem, but in Las Vegas, 87 percent of Bank of America REO properties in communities of color had substantial amounts of trash; 67 percent in Philadelphia had substantial amounts of trash. Having secure locks and windows on an uninhabited home is essential for community safety.  In Denver, 56 percent of properties in communities of color had broken or unsecured doors and 48 percent had broken or boarded windows, while in Las Vegas, 63 percent of properties in communities of color had unsecured windows. “These numbers are unbelievable. It is clear that Bank of America does not care about maintaining REO properties, particularly those in communities of color,” said Arturo Alvarado, Executive Director of the Denver Metro Fair Housing Center. “Bank of America must be held accountable for these actions. Latino and African American homeowners living next to these foreclosures deserve better treatment from Bank of America.” One property in an African American community in Prince George’s County in the Washington, D.C. metro area was flagged for major problems on three different visits between 2011 and 2013.  On December 29, 2011, investigators found trash, overgrown grass, overgrown shrubbery, no “for sale” sign, and damaged siding. On August 10, 2012, a basement  door was left wide open into the property and a letter posted on the door from Prince George’s County Department of Environmental Resources cited Bank of America for "accumulation of litter and rubbish, high grass and weeds (height greater than 1 inch), and/or wrecked, dismantled, unlicensed, abandoned motor vehicles." On September 10, 2013, there was an "Unfit for Human Habitation" sign posted on the door by the Prince George’s County Department of Environmental Resources. A property in a community of color in the Dayton area had trash, overgrown shrubbery, dead grass, invasive plants, no for sale sign, peeling/chipped paint, damaged siding, missing gutter downspout, pervasive mold, and a missing A/C unit. “This house is just one example of what Bank of America is doing to our communities,” said Jim McCarthy, President and CEO of the Miami Valley Fair Housing Center. “Mold in a home can make you extremely sick and can be expensive to remediate. Taking care of the home in the first place is the best remedy. Bank of America is treading a dangerous line that can literally threaten the health of our communities with the lack of maintenance of its properties.” “Poor housing conditions are associated with a range of health issues, including respiratory illness, asthma, lead poisoning, and cancer,” continued Shanna Smith. “REO homes that are not taken care of can create a severe health hazard for an entire community. We have found dead animals, rats, stray cats, mold and other health hazards on the properties. Who wants to live next door, and what real estate agent wants to show a home in dangerous conditions or with a dead animal in the yard?” Also, a property in a Latino community in the Miami area had trash, overgrown grass, overgrown shrubbery, no “for sale” sign, a damaged roof, wood rot, peeling paint, and mold. “It is as if Bank of America is purposefully looking the other way when they see REOs in communities of color,” said Keenya Robertson, president and CEO of Housing Opportunities Project for Excellence, Inc. “It’s incredibly sad to see the value of the homes in the surrounding area of a non-maintained REO plummet.  Homeowners have a difficult, if not impossible time trying to refinance when they live next door to a unkempt Bank of America foreclosure.” Finally, several properties in an African-American community the Atlanta area had overgrown grass and shrubbery, invasive plants, accumulated mail, no “for sale” signs, damaged roofs, or  missing gutters and downspouts. “It is appalling that we have found even more properties in the greater Atlanta area to add to the evidence we have supporting this complaint,” said Gail Williams, executive director of Metro Fair Housing Services, Inc.  “We have told representatives of Bank of America over and over again that they are violating the law.  It’s time for them to change their practices or expect neighbors, neighborhoods and cities to join our complaint and seek damages.” In June 2013, Bank of America announced its second-quarter profits soared to $3.6 billion, up from $2.1 billion a year ago, an increase of 70 percent, through measures which included cost-cutting.
Published
Sep 26, 2013
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