A fair housing complaint similar to one filed Tuesday against Wells Fargo—which alleged the mortgage lender failed to maintain properties in black and Hispanic neighborhoods—is expected to be filed next week against another financial institution, according to an attorney with knowledge of the case.
Cohen Milstein Sellers & Toll associate Peter Romer-Friedman said in an interview that a similar lawsuit would be filed next week against another financial institution, which he declined to name. Romer-Friedman and Joseph Sellers, partner and head of the firm’s civil rights and employment practice group, are representing the National Fair Housing Alliance in the complaint against Wells Fargo. Both are based in D.C.
On Tuesday, the group filed an administrative complaint with the U.S. Department of Housing and Urban Development. The complaint stems from an investigation the alliance conducted that found that Wells Fargo-owned properties in white communities were better maintained than bank-owned properties in minority neighborhoods.
“Wells Fargo’s maintenance and marketing practices raises a very important civil rights issue for communities of color throughout America,” Romer-Friedman said. “Minority communities have been much harder hit than white homeowners have, in part because minority communities were targeted by subprime lending.”
The firm has positioned itself at the forefront of the pushback against banks that allegedly discriminate in the upkeep of foreclosed properties. Last July, Cohen Milstein helped the alliance and African-American homeowners reach a $62 million settlement related to the Road Home program, which provided grants to homeowners whose property was destroyed during Hurricane Katrina. African-American homeowners were more likely than their white counterparts to receive lower assessment values.
The recent investigation into foreclosed properties focused on eight metropolitan areas across the country, including Washington, D.C. The investigation found that in the District, 63 percent of properties in white communities had fewer than five maintenance deficiencies, while only 27 percent of homes in minority neighborhoods reached that mark. Additionally, 87 percent of properties in white communities had a for sale sign displayed, compared to 43 percent properties in minority communities.
“We think this will be very hard for Wells Fargo or any defendant to make an argument that these types of violations don’t violate the Fair Housing Act,” Romer-Friedman said.
But despite his stance that Wells Fargo and similar institutions face a difficult legal fight should the institutions decide to pursue litigation, Romer-Friedman said that settlement is an option.
“The NFHA and four of its members are all very much willing to sit down at the table with Wells Fargo and other banks and resolve this without further investigation or litigation,” he said.
Hi Jaconda,
I think the purpose of the litigation is to force banks like Wells Fargo to change the alleged practices of allowing bank-owned properties in minority neighborhoods to fall into disrepair. By holding a financial institution accountable for its alleged actions, the hope is that it will prevent the decline in value of property and the decay of social wealth.
-Matthew Huisman, Legal Times
Posted by: Matthew Huisman | April 12, 2012 at 01:36 PM
This is interesting for a few reasons. First, Hispanics are now classified as white by the US Census Bureau, so it's not clear how Hispanics are still considered "people of color." Second, the use of "minority" is misleading as the majority of the world's population is "people of color." Most significantly,abandoned and foreclosed properties become dilapidated. These dilapidated properties lower the property values for remaining home owners, which impacts tax revenues, and therefore services and thus creates a cycle that ultimately robs the residents of their over-all wealth, but more importantly safety and well-being. How will these lawsuits remedy these issues?
Posted by: Jaconda Wagner | April 11, 2012 at 08:24 PM