For Immediate Release,
November 18, 2014,
by the National Fair Housing Alliance,
U.S. Bank Accused of Racial Discrimination in Five More Cities
Civil Rights Groups Amend Federal Complaint over Neglected Foreclosures, Adding Data from Cleveland, Columbus, Grand Rapids, Kansas City, Minneapolis and Muskegon
WASHINGTON, D.C. — Today, the National Fair Housing Alliance (NFHA) and three of its member organizations announced new evidence of housing discrimination by Minneapolis-based U.S. Bank as part of an ongoing national investigation into the neglect of bank-owned foreclosures in communities of color. The civil rights groups allege that U.S. Bank fails to maintain and market its foreclosures (also known as real estate owned or REO properties) in African-American and Latino neighborhoods to the same standard as in White neighborhoods, a practice that violates the federal Fair Housing Act. Today, NFHA and its partners are adding 162 REO investigations to the complaint, bringing the total number of U.S. Bank REOs investigated to 651 in 24 metropolitan areas.
The original complaint was filed with the U.S. Department of Housing and Urban Development (HUD) in October 2012. Evidence gathered from 2010 through November 2014 documents an ongoing pattern and practice of discrimination by U.S. Bank in communities of color nationwide. New evidence of discrimination was recently documented, so NFHA and its partners are amending the original complaint for the fourth time. Local governments, neighbors, and neighborhoods organizations continue to be harmed by U.S. Bank’s poor maintenance of its foreclosed properties.
“U.S. Bank has been on notice about its failure to conduct routine maintenance of REO homes where it is listed as owner of record, but the bank continues to ignore the problems,” said Shanna L. Smith, President and CEO of the National Fair Housing Alliance. “The investigations covered middle- and working-class neighborhoods and these families living near these neglected properties simply want U.S. Bank to keep the properties free from trash, rodents, and other forms of blight.”
The fair housing organizations investigated how U.S. Bank maintains and markets bank-owned foreclosures by scoring properties based on 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.
This fourth amended complaint adds data from investigations in Cleveland and Columbus, Ohio, Grand Rapids and Muskegon, Mich., and Kansas City, Kan./Mo. Also, NFHA is adding new data from six recent investigations in Minneapolis, Minn. The overall complaint encompasses neighborhoods in 24 metro regions. The three organizations joining NFHA in submitting new evidence of discrimination are the Housing Research & Advocacy Center (Cleveland), Miami Valley Fair Housing Center (Columbus), and the Fair Housing Center of West Michigan (Grand Rapids and Muskegon).
“U.S. Bank is liable for the differences in treatment between white neighborhoods and Latino and African-American neighborhoods. U.S. Bank likes to say that it is simply the trustee for the homes and not the servicer, but U.S. Bank knows the Fair Housing Act makes owners, even trustees, accountable under the law. U.S. Bank has known about these problems for more than two years but refuses to ensure that its foreclosed homes are properly maintained and pose no health or safety concerns,” said Nancy Haynes, President/CEO of the Fair Housing Center of West Michigan.
“Metropolitan Cleveland was hit hard by the foreclosure crisis and U.S. Bank owns hundreds of homes, but refuses to ensure that simple, routine maintenance tasks such as securing the home and keeping the property clean are conducted,” said Hillary Mason King, Executive Director of Housing Research & Advocacy Center. “African American homeowners living next to these U.S. Bank properties want to be safe and see their property values increase. However, when 48% of the U.S. Bank owned REOs in African-American neighborhoods have trash or debris left on the property, the only thing increasing is blight.”
The groups found that U.S. Bank properties in communities of color had excessive trash, broken windows and unsecured doors, overflowing mail, and overgrown lawns, while most U.S. Bank properties in predominantly White communities did not. These problems can be addressed through simple fixes and are ultimately the responsibility of the bank and its contractors.
“Just like in Cleveland, U.S. Bank is failing to maintain its REOs in the African-American neighborhoods in Columbus,” said Jim McCarthy, Executive Director of the Miami Valley Fair Housing Center. “Sixty-four percent of the REOs in African-American neighborhoods had trash or debris left on the property and 42% had missing or out of place gutters—creating damage to the roof or foundations of the homes. U.S. Bank has a duty to maintain properties for which it is owner of record, but it only seems to take that duty seriously in predominately White neighborhoods.”
“More than 72% of U.S. Bank’s foreclosed homes in communities of color in Grand Rapids had broken or boarded windows and 83% of its REOs in Muskegon’s had broken or board windows,” said Nancy Haynes, Executive Director of the Fair Housing Center of West Michigan. “There is no reason for REOs in communities of color to be treated so badly by U.S. Bank. The cities, neighborhood development groups, and my agency are devoting hundreds of thousands of dollars to redevelop our neighborhoods, but U.S. Bank’s failure to maintain its properties is dragging down our investments. U.S. Bank must end its bad practices today and invest in the neighborhoods it is hurting.”
“The U.S. Bank-owned foreclosed homes in African-American neighborhoods in Kansas City, Kansas were poorly maintained with 81% having trash or debris left on the property,” said Shanna Smith, President/CEO of NFHA. “U.S. Bank maintains its REO homes in White neighborhoods; it can certainly do the same in African-American and Latino neighborhoods.”
“The National Fair Housing Alliance returned to Minneapolis in late October following the October 8 news conference to see if U.S. Bank would change its bad practices and start taking care of its REOs in its hometown,” said Shanna L. Smith. “We looked at 6 U.S. Bank REOs and found the same problems in African-American neighborhoods —5 REOs were very poorly maintained and the REO in the White neighborhood was well-maintained. Clearly, U.S. Bank does not take these civil rights allegations seriously.”
The Fair Housing Act makes it illegal to discriminate based on race, color, national origin, religion, sex, disability, or familial status, as well as on 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 FOR U.S. BANK
Full data available at www.nationalfairhousing.org
Cleveland, Ohio:
- REO properties in communities of color were 4.6 times more likely to have 10% to 50% of the property covered in invasive plants compared to REO properties in White communities (22.2% of the REO properties in communities of color had 10% to 50% of the property covered in invasive plants, while only 4.8% of the REO properties in White communities had the same deficiency documented).
- REO properties in communities of color were 7.7 times more likely to have unsecured holes in the structure of the home compared to REO properties in White communities (37.0% of the REO properties in communities of color had unsecured holes in the structure of the home, while only 4.8% of the REO properties in White communities had the same deficiency documented).
Columbus, Ohio:
- REO properties in communities of color were 5.0 times more likely to have trash or debris on the property compared to REO properties in White communities (64.3% of the REO properties in communities of color had trash or debris, while only 12.9% of the REO properties in White communities had the same problem).
- REO properties in communities of color were 2.9 times more likely to have broken or boarded windows compared to REO properties in White communities (28.6% of the REO properties in communities of color had broken or boarded windows, while only 9.7% of the REO properties in White communities had the same issue documented).
Grand Rapids, Mich.:
- REO properties in communities of color were 5.2 times more likely to have 10 or more maintenance or marketing deficiencies compared to REO properties in White communities (52.4% of the REO properties in communities of color had 10 or more maintenance or marketing deficiencies documented, while only 10.0% of the REO properties in White communities had 10 or more maintenance or marketing deficiencies).
- 38.1% of the REO properties in communities of color had overgrown or dead shrubbery, while none of the REO properties in White communities had the same problem.
Muskegon, Mich.:
- REO properties in communities of color were 8.2 times more likely to have overgrown grass or accumulated leaves compared to REO properties in White communities (67.7%) of the REO properties in communities of color had overgrown grass or accumulated leaves, while only 8.3% of the REO properties in White communities had the same problem).
- REO properties in communities of color were 2.5 times more likely to have broken or boarded windows compared to REO properties in White communities (83.3% of the REO properties in communities of color had broken or boarded windows, while only 33.3% of the REO properties in White communities similarly had broken or boarded windows).
Kansas City, Kan./Mo.:
- 27.3% of the REO properties in communities of color had unsecured, broken, or boarded doors, while not a single REO property in a White community had the same issue.
- 45.5% of the REO properties in communities of color had broken or boarded windows, while none of the REO properties in 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.
The Housing Research & Advocacy Center
The Housing Research & Advocacy Center is a nonprofit fair housing organization whose mission 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. The Housing Center facilitates the Northeast Ohio Fair Housing Collaborative and is a founding member of Greater Cleveland Community Shares.
The Miami Valley Fair Housing Center
The Miami Valley Fair Housing Center seeks to eliminate housing discrimination against all persons because of race, color, religion, national origin, sex, disability, familial status, or any other characteristic protected under state or local laws. In furthering this goal, MVFHC engages in activities designed to encourage fair housing practices through educational efforts; assists person who believe they have been victims of housing discrimination; identifies barriers to fair housing in order to help counteract and eliminate discriminatory housing practices; works with elected and government representatives to protect and improve fair housing laws; and takes all appropriate and necessary action to ensure that fair housing laws are properly and fairly enforced throughout the Miami Valley.
The Fair Housing Center of West Michigan
The Fair Housing Center of West Michigan is a private, non-profit fair housing organization committed to providing comprehensive fair housing services, including education, outreach, research, advocacy, and enforcement. The Fair Housing Center is the front door to housing choice, ensuring that everyone in our community has equal opportunity to choose housing that’s right for them. Through education, research, and advocacy, we prevent housing discrimination, remove barriers that allow it to persist, and restore housing choice when discrimination happens.
The work that provided the basis for this publication was supported in part by funding under agrant 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 theaccuracy of the statements and interpretations contained in this publication. Such interpretations do not necessarily reflect the views of the federal Government.
