New Orleans added to housing discrimination lawsuit against the bank
On March 10, the National Fair Housing Alliance and four of its member organizations announced new evidence of housing discrimination by U.S. Bank, N.A. The civil rights groups allege that U.S. Bank continues to maintain and market foreclosed homes in white neighborhoods in a much better manner than in African-American and Latino neighborhoods.
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.
Failing to maintain and market homes because of the racial or ethnic composition of the neighborhood violates federal law.
In addition to New Orleans, Dallas, Hampton Roads, Va., and New Haven, Conn., are being added to the pending federal complaint filed with the U.S. Department of Housing and Urban Development (HUD). NFHA has also provided HUD with new evidence in the Washington, D.C. metro area supporting their allegations of a continuing violation of the Fair Housing Act by U.S. Bank. The four member organizations that filed the complaint in conjunction with NFHA are the Connecticut Fair Housing Center, Inc., Greater New Orleans Fair Housing Action Center, Housing Opportunities Made Equal of Virginia, Inc., and the North Texas Fair Housing Center.
“U.S. Bank ought to be concerned that it is contributing to blight and creating health and safety risks in communities of color,” said Shanna L. Smith, President and CEO of the National Fair Housing Alliance.“Instead, U.S. Bank turns a blind eye to its responsibility to the neighborhoods and local governments that are losing millions of dollars as property values decline because of the Bank’s poorly maintained and marketed REOs. The Bank is also ignoring its responsibility to the trusts that hired the bank to maintain their assets. The Fair Housing Act makes it clear that as the trustee and owner of record, U.S. Bank is responsible for the maintenance of these properties. When confronted by the City of Oakland, Calif. about its blighted REOs, for example, U.S. Bank immediately instructed its servicers to clean up the REOs. But then with regard to this complaint, U.S. Bank turns around and issues statements saying it has no control over its bank-owned homes. They can’t have it both ways.”
The complaint now brings the total to 35 cities in 15 metropolitan areas where U.S. Bank is alleged to have discriminated in the maintenance and marketing of its bank-owned homes and homes for which it is the owner of record as the trustee. Seventy-nine new properties were added to the complaint, bringing the total number of properties to 352.
The organizations evaluated the maintenance and marketing of bank-owned foreclosed homes for 39 different types of deficiencies, including broken windows and doors, broken and obstructed gutters and downspouts, accumulation of trash, overgrown lawns, no “for sale” signs, and other issues that affect curb appeal, the security of the home, and the value of the home.
U.S. Bank properties in communities of color had excessive trash, unsecured locks and windows, overflowing mail, and overgrown lawns. All of these problems are easy to fix and are the responsibility of the bank and its contractors. Trash is an eyesore, a health and safety risk, and makes a home unappealing to buyers.
In New Orleans, 22 homes where US Bank was listed as the owner of record were investigated. Nineteen are located in African American neighborhoods, while three are located in predominately White neighborhoods.
The local fair housing investigation uncovered that:
- 84 percent of US Bank’s homes in African American neighborhoods had substantial amounts of trash on the property.
- 84 percent of US bank’s homes in African American neighborhoods had between 10 percent- 50 percent of the lawn covered in dead grass.
- 63 percent of US Bank’s homes were covered with invasive plants/weeds while NONE of its homes in White neighborhoods were
- 74 percent or 14 US Bank homes in African American neighborhoods had damaged fences & missing “for sale” signs while only one of the three homes in a White neighborhood did.
- 42 percent of US Bank’s homes had broken or boarded windows while NONE of its REOs in White neighborhoods did.
“Giving all residents a fair shot to rebuild is a fundamental part of our approach to the Katrina recovery process,” said James Perry, Executive Director of the Greater New Orleans Fair Housing Action Center. “We predicted that the barriers to recovery would be plentiful but we were shocked to find that U.S. Bank was thwarting the heroic efforts of residents fighting to rebuild their neighborhoods by refusing to properly care for foreclosed homes in Black neighborhoods.”
Nearly two years after NFHA filed its first complaint against U.S. Bank, new evidence shows that the bank continues to discriminate in communities of color in the Washington, DC metro area. The majority of the new properties investigated had unsecured doors, overgrown grass, and missing “for sale” signs. One property added to the complaint in the Washington, D.C. Metro area had uncut grass, overgrown shrubbery, mail that flowed out of the mailbox and a tool shed with a door left wide open.
NFHA also has pending federal complaints against U.S. Bank, Bank of America, and Deutsche Bank.
“These banks are discriminating in many of the same neighborhoods of color,” continued Smith. “They are compounding the damage and blight to these communities already caused by the big banks during the foreclosure crisis, and making it even harder for these neighborhoods to bounce back.”
The original complaint against U.S. Bank was filed with the U.S. Department of Housing and Urban Development on April 17, 2012 and includes Atlanta; Dayton, Ohio; Miami/Fort Lauderdale, Fla.; Oakland/Richmond/Concord, Calif., and Washington, DC. The complaint was then amended last October to include the following cities: Baton Rouge, Chicago, Memphis and Milwaukee.
NFHA and its member agencies are represented by Relman, Dane & Colfax PLLC in Washington, DC.