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Civil Rights Organization Alleges Discrimination by Banks in Maintaining Foreclosed Properties

April 5th, 2012

This week the National Fair Housing Alliance released findings into an investigation that allege banks and other lenders are routinely neglecting foreclosed properties in minority neighborhoods.

The report, The Banks Are Back; Our Neighborhoods Are Not, was compiled after conducting investigations in nine cities. Atlanta was among those cities believed to have incidents of discrimination.

Broken windows and doors, piles of trash and overgrown weeds are a just a few eyesores found on foreclosed properties in African American and Latino neighborhoods.

National Fair Housing Alliance president and CEO Shanna Smith says the blight that, “these neighborhoods have suffered from is all the responsibility of the banks who own and have an obligation to market and maintain these properties.”

The foreclosed homes are called Real Estate Owned Properties or REOs.

Gail Williams, with Metro Fair Housing Services in Atlanta says 123 properties were investigated.

Williams’ organization is a part of the Alliance.

“Thirty-two percent of the REOS in African American neighborhoods had more than 10 deficits with not a single property in white neighborhoods having more than 10 deficits” says Williams.

Some lenders, according to the Alliance, blame contractors hired to maintain the properties.

The Alliance says other lenders claim the properties were already in bad shape.

But Shanna Smith says those are excuses and counters, “what we’re evaluating are routine maintenance issues, mowing the lawn, shoveling the snow, putting that gutter back up things that preserve the asset and preserve the value.”

Smith says when it comes to making those repairs; the lenders appear to be biased.

“Instead of making a repair to the roof or replacing windows, they’ll be told oh just put in new carpeting and paint it and sell it as it, where in white neighborhoods they’ll make those more important repairs rather than a cosmetic repair”

Because the investigation is still ongoing, an official complaint won’t be filed until next week and some of the six lenders mentioned in the investigation won’t be released until then.