Civil Rights Organizations Add Cleveland, Kansas City, New Orleans, and Vallejo to Federal Complaint over Neglected Foreclosures

WASHINGTON, D.C. — Today, the National Fair Housing Alliance and three of its member organizations announced new evidence of housing discrimination by Bank of America. The civil rights groups allege that Bank of America continues to maintain and market bank-owned foreclosures (also known as real estate owned or REO properties) in white neighborhoods better than in African-American and Latino neighborhoods, a practice that violates the federal Fair Housing Act.

This announcement marks the second anniversary of the initial filing of a complaint with the U.S. Department of Housing and Urban Development (HUD) in September 2012. Evidence gathered from 2011 through September 29, 2014, documents an ongoing pattern and practice of discrimination. NFHA and its partners continue to amend the complaint as new  evidence of discrimination comes to light. Currently, NFHA and its partners have investigated 868 REOs in 41 cities across the United States.

“It’s shocking to see Bank of America continue to engage in this type of illegal discrimination on such a large scale,” said Shanna L. Smith, President and CEO of the National Fair Housing Alliance. “NFHA alerted Bank of America about these problems in June 2009. We met several times with bank representatives and shared information about these problems.  Instead of implementing quality control measures to address these problems, Bank of America continues to neglect basic maintenance tasks in communities of color, such as mowing grass, securing doors and windows, cleaning gutters, and removing debris. Such neglect damages neighborhood property values, drains local tax revenues and creates health and safety risks for the community.”

This fifth amended complaint adds data from investigations in Cleveland, Ohio, Kansas City, Kan./Mo., New Orleans, La., and Vallejo, Calif. The overall complaint encompasses neighborhoods in 41 cities comprising 24 metro regions. The three member organizations joining NFHA in submitting new evidence of discrimination are Housing Resource & Advocacy Center (Cleveland), Greater New Orleans Fair Housing Action Center (New Orleans), and Fair Housing of Marin (Vallejo).

The organizations investigated the maintenance and marketing of bank-owned foreclosed homes for 39 different types of deficiencies, including broken windows and doors, broken and obstructed gutters and downspouts, accumulated trash, overgrown lawns and shrubs, no “for sale” signs, and other issues that affect curb appeal, the security of the home, and the value of the property.

“Cleveland residents take a great deal of pride in their neighborhoods. Imagine living next door to a poorly maintained Bank of America foreclosure and trying to refinance your home, only to see your loan application rejected because you live next door to a risk,” said Hilary King, Executive Director of the Housing Research & Advocacy Center. “It’s just a shame. Bank of America must step up and pay for the damage it has caused to our neighborhoods.”

Bank of America properties in communities of color had excessive trash, unsecured locks and windows, overflowing mail, and overgrown lawns, but most Bank of America properties in predominantly white communities did not. These problems are simple to fix and are the responsibility of the bank and its contractors.

“Bank of America should take meaningful steps toward fixing this problem,” said James Perry, Executive Director of the Greater New Orleans Fair Housing Action Center. “Communities in New Orleans were hit hard by hurricane Katrina and are now suffering because of Bank of America. Their property values have taken a nosedive because of Bank of America’s discriminatory neglect.”

“Bank of America boarded windows in communities of color rather than installing clear boarding or fixing the windows. Boarded windows carry a stigma and imply the neighborhood is not safe or desirable,” said Caroline Peattie, Executive Director of Fair Housing of Marin. “Bank of America must be held accountable for failing to maintain its foreclosure inventory. In California, Bank of America has played a major part in changing single family owner-occupied neighborhoods into rental communities, as large investors buy REO homes in quantity and drag property values down in the process.”

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.

Additional statistics and photos are available at www.nationalfairhousing.org.

CITY-SPECIFIC INFORMATION

Full data available at www.nationalfairhousing.org

Cleveland, OH:

• 45.5% of REO properties in communities of color had 10 or more deficiencies, while only 25.0% of REO properties in predominantly White communities had 10 or more deficiencies.
• REO properties in communities of color were 5.1 times more likely than REO properties in predominantly White communities to have between 10% and 50% of the property covered in invasive plants (63.6% of REO properties in communities of color had invasive plants while only 12.5% of REO properties in White communities had the same issue observed).

Kansas City, KS/MO:

• 50.0% of REO properties in communities of color had 10 or more deficiencies, while none of the REO properties in predominantly White communities had 10 or more deficiencies.
• REO properties in White communities were 6.7 times more likely than REO properties in communities of color to have fewer than 5 deficiencies (83.3% of REO properties in White communities had fewer than 5 deficiencies, while only 12.5% of REO properties in communities of color had fewer than 5 deficiencies).

New Orleans, LA:

• 61.1% of REO properties in communities of color had 10 or more deficiencies, while none of the REO properties in predominantly White communities had 10 or more deficiencies.
• REO properties in communities of color were 6.7 times more likely than REO properties in predominantly White communities to have trash or debris on the premises (83.3% of REO properties in communities of color had trash or debris while only 12.5% of REO properties in predominantly White communities had the same problem).

Vallejo, CA:

• 57.1% of REO properties in White communities had fewer than 5 deficiencies, while only 30.8% of REO properties in communities of color had fewer than 5 deficiencies.
• 23.1% of REO properties in communities of color had unsecured, broken, or boarded doors while none of the REO properties in predominantly White communities had the same issue observed, and 30.8% of the REO properties in communities of color had unsecured, broken, or boarded windows while none of the REO properties in predominantly White communities had the same deficiency documented.
• REO properties in communities of color were 3.0 times more likely than REO properties in predominantly White neighborhoods to have no professional “for sale” sign marketing the home  (84.6% of REO properties in communities of color had a missing “for sale” sign while only 28.6% of REO properties in predominantly White communities had the same problem).

The National Fair Housing Alliance

Founded in 1988, the National Fair Housing Alliance is a consortium of more than 220 private, non-profit fair housing organizations, state and local civil rights agencies, and individuals from throughout the United States.  Headquartered in Washington, D.C., the National Fair Housing Alliance, through comprehensive education, advocacy, and enforcement programs, provides equal access to apartments, houses, mortgage loans, and insurance policies for all residents in the nation.

Fair Housing of Marin

Founded in 1986, Fair Housing of Marin (FHOM) provides counseling, investigation, mediation and legal referrals to persons experiencing housing discrimination. In addition, FHOM conducts outreach activities and offers programs that educate the community about fair housing and the value of diversity. FHOM also conducts preventive trainings for housing providers and provides pre-purchase and foreclosure prevention counseling. For more information, call Fair Housing of Marin at (415) 457-5025 or TDD:(800) 735-2922.

The Greater New Orleans Fair Housing Action Center

The Greater New Orleans Fair Housing Action Center (GNOFHAC) is a private non-profit organization. The Center was established by a group of concerned New Orleanians in 1995 with the help of the National Fair Housing Alliance and a grant from the United States Department of Housing and Urban Development. GNOFHAC is dedicated to eliminating housing discrimination and furthering equal housing opportunities through education, outreach, advocacy, and enforcement of fair housing laws across the metro New Orleans area.

Housing Research & Advocacy Center

The mission of the Housing Research & Advocacy Center (Housing Center) is to promote fair housing and diverse communities and to work to eliminate housing discrimination in Northeast Ohio by providing effective research, education, and advocacy. Our vision is to create inclusive neighborhoods which encourage respect for diversity, nurture acceptance and understanding, expose residents to different perspectives, and provide access to personal growth and economic opportunities. Program activities include conducting research and mapping patterns of housing discrimination; educating consumers and housing providers; advocating for policy change initiatives involving housing and diversity; and engaging in enforcement efforts to address discrimination. Each activity plays an important role in assuring equal access to housing and to the life opportunities that are impacted by housing – access to quality schools, transportation, jobs, and a safe, healthy living environment.

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The work that provided the basis for this investigation was supported in part by funding under a grant from the U.S. Department of Housing and Urban Development.  The substance and findings of the work are dedicated to the public. The author and publisher are solely responsible for the accuracy of the statements and interpretations contained in this release.  Such interpretations do not necessarily reflect the views of the Federal Government.

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