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Miami Valley Fair Housing Claims Fannie Mae Discrimination

Update 5/13/15:

Fannie Mae released this statement after the discrimination claim was made with HUD:

"We strongly disagree with these allegations and firmly believe they have no merit.  We are confident that our standards ensure that properties in all neighborhoods are treated equally, and we perform rigorous quality control to make sure that is the case.  We remain dedicated to neighborhood stabilization efforts across the nation, including with respect to our maintenance of foreclosed properties."

Story 5/12/15:

The Miami Valley Fair Housing Center (MVFHC), the National Fair Housing Alliance, and 18 other groups say they’re filing a discrimination complaint against the Federal National Mortgage Association known as Fannie Mae.

They allege that Fannie Mae has failed to maintain and attempt to resell bank-owned foreclosure properties in African American and Latino neighborhoods.

Jim McCarthy with Miami Valley Fair Housing calls it a clear violation of the federal Fair Housing Act.

“We don’t expect these organizations or companies like Fannie Mae are going to improve the property value of a house that they take back in foreclosure," he said. "But we do believe they have an obligation both to the investors, who provided the money to secure the loan to begin with, and to the neighborhood to at least maintain the property and market to try and get it back into a usable condition.”

The complaint will be filed Wednesday with the U.S. Department of Housing & Urban Development (HUD) and follows similar complaints lodged against Bank of America, US Bank and others. 

Further information provided by the Miami Valley Fair Housing Commission (WYSO is not responsible for the following content):

MVFHC’s investigation of Fannie Mae-owned properties examined 71 REO properties. Of these REO properties, 26 were in predominantly African American communities, one was located in a predominantly non-White community; and 44 were located in predominantly White communities. MVFHC’s investigation found that:

·       45.5% of the REO properties in White communities had fewer than 5 maintenance or marketing deficiencies documented, while none of the REO properties in communities of color had fewer than 5 deficiencies.·       59.3% of the REO properties in communities of color had 10 or more maintenance or marketing deficiencies documented, while only 18.2% of the REO properties in White communities had 10 or more maintenance or marketing deficiencies.

REO properties in communities of color were far more likely to have certain types of deficiencies or problems than REO properties in White communities. Nationally, MVFHC and its partners found significant racial disparities in the majority of the objective factors measured in their investigations:

·       63.0% of the REO properties in communities of color had overgrown or dead shrubbery, while only 43.2% of the REO properties in White communities had the same problem.·       59.3% of the REO properties in communities of color had between 10% and 50% of the property covered in invasive plants, while only 31.8% of the REO properties in White communities had the same problem.·       63.0% of the REO properties in communities of color had a broken, boarded, or unsecured window, while only 15.9% of the REO properties in White communities had the same problem.·       70.4% of the REO properties in communities of color had peeling or chipped paint, while only 40.9% of the REO properties in White communities had the same problem.·       51.9% of the REO properties in communities of color had missing or out of place gutters, while only 18.2% of the REO properties in White communities had the same problem.

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.