Banks Are Letting Foreclosed Homes in Minority Neighborhoods Decline

Neglect of housing keeps Black communities in the red.

Posted: 04/25/2011 07:59 AM EDT
Filed Under foreclosure

The home on the right is in an Black neighborhood. The report points out extremely overgrown shrubs, accumulation of mail and warning signs and notices—all eye sores and invitations to vandals. The home on the left is a well-maintained REO in a white neighborhood. (Photos: Courtesy of REO News Conference)

Apparently, the shabby treatment African-Americans have received during the mortgage crisis doesn’t end when they’re forced out of their homes. A report released by four fair-housing groups shows that banks are neglecting foreclosed homes in minority neighborhoods.

“Here Comes the Bank, There Goes Our Neighborhood: How Lenders Discriminate in the Treatment of Foreclosed Homes” looked at 624 foreclosed and distressed properties in Washington, D.C.; Maryland suburbs; Dayton, Ohio; New Haven and Hartford, Connecticut; and Richmond, Virginia. The report showed that banks give more care to the maintenance of homes they own in white neighborhoods than they do to those in African-American and Latino neighborhoods.

“In the aftermath of the foreclosure crisis, we are again seeing banks behave in a way that raises civil rights concerns,” said Shanna L. Smith, National Fair Housing Alliance president and CEO. “By failing to maintain properties in African-American neighborhoods in the same way that they maintain similar properties in white neighborhoods, banks are undervaluing properties and helping to stall economic recovery in our nation’s neighborhoods of color.”

According to the report, foreclosed properties in white neighborhoods are more likely to have well-maintained lawns, secured entrances and professional sales marketing. In contrast, there is a stark difference in minority neighborhoods, where foreclosed properties have poorly maintained lawns, unsecured entrances and look vacant and abandoned. This perpetuates segregation and impedes the nation’s economic recovery, the report says.

The National Fair Housing Alliance and three of its members, the Connecticut Fair Housing Center, the Miami Valley Fair Housing Center and Housing Opportunities Made Equal, used a 100-point scoring system to rate the level of upkeep. In Ohio, for example, foreclosed properties in white neighborhoods scored 72 out of 100 points, while Black foreclosed homes scored 64 points. During that same period, an investigation of foreclosed homes in Hartford and New Haven found that white, African-American and Latino neighborhoods received scores of 89, 78 and 66, respectively. The fair-housing groups believe such neglect could be in violation of the federal Fair Housing Act.

To view the difference, click here.

 

 

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