Bank of America Accused of Fair Housing Violations

Bank of America is coming under fire for alleged discriminatory practices in the way the bank has maintained foreclosed properties in minority neighborhoods.

The National Fair Housing Alliance on Tuesday filed an administrative complaint with the U.S. Department of Housing and Urban Development against Bank of America, alleging violations of the Fair Housing Act.

The discrimination complaint comes five months after the group published a report on different bank-owned properties [sometimes called real estate-owned] in eight U.S. cities, including Washington. The alliance previously filed similar complaints against Wells Fargo and U.S. Bancorp.

The fair housing alliance's complaint deals with property evaluated since 2011 on factors like curb appeal, structure, signage, painting and siding, gutters, water damage and utilities. Based on those factors, the alliance gives the property a grade. Ultimately, the group found that properties in predominately white neighborhoods were better maintained and marketed than those found in African American and Hispanic neighborhoods.

During a conference call Tuesday, Shanna Smith, the National Fair Housing Alliance's president and CEO, said that the group first put Bank of America on notice regarding violations in 2009.

"Bank of America did not reach out to us until December 2011 and we've had some discussions and they've been obviously unfruitful," Smith said during the call. "Bank of America has had the privilege to borrow money at the Federal Reserve discount window at virtually zero percent interest and yet they can't find a way with all the profits they’ve made in the past few years to market, fix and maintain [bank-owned] properties."

Despite the charges directed at Bank of America, Smith said that the alliance is willing to work with the bank through the HUD process to find a solution. In both the Washington and Phoenix metropolitan areas, there were fewer bank-owned properties in predominately white neighborhoods to evaluate. The reason, the complaint states, is that because the properties are better maintained and marketed, the homes are sold much quicker. But when compared to white communities on a national scale, the disparity still existed.

Among bank-owned properties in communities of color in Washington, the complaint stated that 80 percent of properties did not have a for sale sign. When it came to maintenance violations, 92.5 percent of properties had more than five. It was found that 70 percent of properties had "a substantial amount of trash."

It will be up to HUD to investigate the allegations and either reach a settlement agreement with the bank, dismiss the complaint or issue a charge of discrimination. The Department of Justice can then takes up the case before a federal court.

Peter Romer-Friedman, an associate at Cohen Milstein Sellers & Toll who is assisting in the case, said in an interview that the process for investigating Bank of America is the same as for Wells Fargo and U.S. Bancorp.

"Since we've filed the complaint, HUD has begun a very thorough investigation of the allegations in our complaint against Wells Fargo," Romer-Friedman said. "We've expressed our willingness to settle these cases with Wells Fargo and the banks from the very beginning. We remain open to that process and we are confident that we can resolve these complaints if we have a party on the other side who is willing to do so."

Romer-Friedman said that the firm and the fair housing alliance would continue to investigate other banks in more communities across the country. "The damage to communities of color of having poorly maintained and marketed properties is that it builds up the inventory," Romer-Friedman said. "It makes it harder to sell these homes and it drives down everyone's home values in these neighborhoods."

A Bank of America spokeswoman did not respond to a request for comment.

Comments

[Gary M. Piwonka]

Correction..."Bonnie & Clyde."

[Gary M. Piwonka]

A further comment on Tom's use of the word "gift." What has taken place in the past few years with "Banksters," in my personal opinion, make Jesse James and Bobbie & Clyde seem as petty candy store thieves.

[Gary M. Piwonka]

Did I read above by "Tom" the word "gift," or are my eyes deceiving me?

[Tom]

everbody beats the drum of victimhood. But let's remember two things. 1)The homeowner made a commitment they couldn't keep. Don't expect the bank to take on the carrying cost of your mistake, it's a gift if they do
2) the banks have no reason to depreciate their asset base for something they can actually sell now. They aren't letting these houses rot because they are in minority neighborhoods, they are letting them rot because it is unlikely they will sell them anytime soon.

[Gary M. Piwonka]

I would like to comment further that I have received numerous boilerplate letters and "Notices of Foreclosures," but all irrelevant to the discussing or attempting to resolve the issues at hand.

Thanks again,

Gary M. Piwonka

[Gary M. Piwonka]

Now I can understand why I cannot, for over 3 years now, receive any response to any questions I have concerning my loan that BOA took over from Countrywide. I have, literally, hundreds of certified letters and Overnight Delivery letters, which have cost me hundreds of dollars, try and discuss questions concerning my loan. All I receive are phone calls that end up in hours of duration with nothing accomplished, but kicking the can to someone else. I would much prefer water boarding than go through the by-phone process I have endured for years. I do not understand what it is with these people.....free interest money to help people who provided them the Jillions and remain as arrogant and above-the-law as ever.

Thanks,
Gary M. Piwonka
3850 CR 482
P.O. Box 126
Midfield, Texas 77458
Loan No. 031521519

[Veronica]

It took Bank of America almost two years after I filed bankruptcy to file a motion to life the bankruptcy stay and start the foreclosure process on my house. I begged them over a year and a half ago to start this process because I have been paying vacant homeowners insurance to protect myself from a liability standpoint, in addition to paying the monthly HOA dues. Bank of America actually contacted my homeowners insurer to tell them the house was vacant and then my policy was not renewed so I had to buy very expensive vacant homeowners insurance. This house is also in a hispanic neighborhood. I'm sure I'm not the only one who has been in this situation. If they would have started the foreclosure process when I asked, then the value of the house would have been higher than it is now and a family could have moved in. But they don't care. They want to place the burden on the homeowner for as long as possible.