For Immediate Release

April 8, 2014

Contact:   Kate Scott        kscott@gnofairhousing.org         (504)596-2100

Largest Property Preservation Company in Nation Accused of Housing Discrimination

Safeguard Properties Accused of Racial Discrimination in Maintenance of Foreclosed Homes in Dayton, Toledo, Baton Rouge, New Orleans, and Memphis

Today, the National Fair Housing Alliance (NFHA) and three of its member organizations announced an amended federal housing discrimination complaint against Safeguard Properties, headquartered in Ohio. Safeguard is the nation’s largest privately-held property preservation company, also known as a field service vendor. Fannie Mae hired Safeguard to maintain and market its bank-owned, foreclosed homes, also known as Real Estate Owned or REO properties.

This complaint, filed with the U.S. Department of Housing and Urban Development, is the result of an investigation into Safeguard Properties and its failure to maintain foreclosed homes in African-American and Latino neighborhoods as compared to White neighborhoods in a number of metropolitan areas nationwide. Today’s complaint presents new evidence from Nueva Orleans and highlights the investigations in Dayton, Toledo, Baton Rouge, and Memphis. NFHA and its partner agencies filed their first complaint against Safeguard Properties in 2013. Failing to maintain homes based on the racial or ethnic composition of the neighborhood violates the federal Fair Housing Act.

Safeguard Properties was recently named in a report by the Federal Housing Finance Agency’s Office of the Inspector General, which described how the preservation companies that the OIG reviewed provided inaccurate information and manipulated photographs in their reports to Fannie Mae. The Illinois Attorney General also has a lawsuit pending against Safeguard.

“After we filed our first complaint against Safeguard Properties in March 2013, we met with them to outline the maintenance disparities in African-American and White neighborhoods,” said Shanna L. Smith, President and CEO of the National Fair Housing Alliance. “However, Safeguard claimed the examples of failed maintenance were isolated incidents and has continued in its failure to maintain properties in African-American and Latino neighborhoods.”

Safeguard is contracted to cover eight simple maintenance issues:

1. substantial accumulation of trash or debris;
2. overgrown grass/leaves;
3. overgrown or dead shrubbery;
4. invasive plants (covering 10% or more of the structure);
5. unsecured or broken doors;
6. unsecured or broken windows;
7. unsecured holes in the structure;
8. broken or missing steps and handrails.

NFHA, the Miami Valley Fair Housing Center in Dayton, OH, the Toledo Fair Housing Center, and the Greater New Orleans Fair Housing Action Center described their findings in Dayton, Toledo, Baton Rouge, New Orleans, and Memphis. In all cities, the groups found significant amounts of trash, overgrown invasive plants, and unsecured holes in the building structures of homes in communities of color, while rarely finding the same problems in White neighborhoods.

NFHA and its member agencies are represented by Relman, Dane & Colfax PLLC located in Washington, D.C.

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

NFHA has also filed complaints regarding the maintenance and marketing of foreclosed homes against Bank of America, Deutsche Bank, and US Bank. Many of the neighborhoods investigated overlap. Added together, the blight and damage caused to these communities by the banks is compounded. Health and safety risks increase because of accumulated trash and overgrown lawns attracting rodents and insects and broken windows and doors inviting vandalism.

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.

CITY-SPECIFIC INFORMATION

Dayton:

• 63% of properties that Safeguard serviced in African-American neighborhoods had three or more deficiencies compared to only 19% in White neighborhoods.
• 64% had substantial overgrowth of invasive plants, 55% had damaged steps or handrails, and 37% had unsecured holes in the building structures.

“It is inexcusable that a company that brags about being a ‘turnkey resource for all aspects of default property management’ would allow properties to be maintained in this fashion. Safeguard Properties claims to pride itself on its ‘attention to detail,’ but anyone who lives near or around a property maintained by Safeguard knows better,” said Jim McCarthy, President and CEO of the Miami Valley Fair Housing Center.

Toledo:

• 88% of properties that Safeguard serviced in African-American neighborhoods had three or more deficiencies, versus 24% in White communities.
•  75% had broken or unsecured doors, 50% had damaged steps or handrails, and 38% had unsecured holes in the building structures.

“We have seen a failure on the part of Safeguard to provide adequate maintenance of REO properties in communities of color. These communities were hardest hit by predatory lenders, then the foreclosure crisis, and now blighted REO properties. The lenders and the preservation companies, like Safeguard, played a role in the decline of the American dream; now they must play a role in neighborhood stabilization,” said Michael Marsh, President and CEO of the Toledo Fair Housing Center.

Baton Rouge:

• Every Safeguard-serviced property in African-American neighborhoods had overgrown grass and leaves, and half had significant trash, compared to none in White neighborhoods.

New Orleans:

• 78% of Safeguard-serviced properties in communities of color had significant trash accumulation, compared to 12% in White neighborhoods.
• 52% of properties in communities of color had overgrown or dead shrubbery, compared to 18% in White neighborhoods.

“You might assume that you’ve got a great neighbor in a company with a name like ‘Safeguard.’ But in Southeast Louisiana, we have found that having this company as your neighbor means you actually need to keep your guard up,” said James Perry, Executive Director of the Greater New Orleans Fair Housing Action Center. “We have been fighting blight for years, but we never expected that neighborhoods of color would have to confront Safeguard for un-neighborly, value-depreciating antics like these. Today, we’re simply calling on Safeguard to step up to the plate and play fair in all New Orleans and Baton Rouge neighborhoods, regardless of their racial makeup.”

Memphis:

• 54% of properties serviced by Safeguard in neighborhoods of color had significant trash accumulation, compared to none in White neighborhoods.
• Almost half of Safeguard-serviced properties in neighborhoods of color had unsecured holes in the building structures.
• 37% had leaves and overgrown grass, and more than one-quarter had broken or unsecured windows.

“Buy a rake and clean it up, Safeguard. Fannie Mae is paying you enough to do something as simple as that,” said Shanna L. Smith, President and CEO of the National Fair Housing Alliance. “It is just shameful – not to mention illegal – that Safeguard blatantly disregards neighborhoods of color in Memphis by leaving a mess on the properties it claims to service. This creates an eyesore and damages the property values in these communities. ” 

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.

Toledo Fair Housing Center

The Toledo Fair Housing Center’s mission is to eliminate practices of housing discrimination and expand equal housing opportunities. In fulfilling that mission, the Center has set many precedents and increased housing opportunities locally and nationally. The Center has been a leader in fair housing enforcement, having investigated over 11,000 complaints of discrimination and recovered over $30 million in damages.

Miami Valley Fair Housing Center

The Miami Valley Fair Housing Center is a comprehensive full-service fair housing center in Dayton, Ohio, with experience in auditing and testing activities, anti-predatory lending investigation and remedy, mortgage rescue scam intervention, foreclosure prevention counseling, and mortgage modifications, as well as fair housing and fair lending education and outreach. MVFHC works throughout the Miami Valley to eliminate housing discrimination and ensure equal housing opportunity for all people in its region.

Greater New Orleans Fair Housing Action Center

The Greater New Orleans Fair Housing Action Center (GNOFHAC) is a private, non-profit civil rights organization that was established in the summer of 1995 to eradicate housing discrimination throughout the greater New Orleans area through education, investigation, and enforcement activities. GNOFHAC is dedicated to fighting housing discrimination not only because it is illegal, but also because it is a divisive force that perpetuates poverty, segregation, ignorance, fear, and hatred.

The work that provided the basis for this publication was supported, in part, by funding under a grant with 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 publication. Such interpretations do not necessarily reflect the views of the Federal Government.

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