Fair Housing Agencies File HUD Complaint Against Bank of America

Fair Housing Agencies File HUD Complaint Against Bank of America A Tale of Two Recoveries: Bank of America s failure to maintain and market bank-owned homes in African American and Latino neighborhoods across the United States

Introductions National Fair Housing Alliance Shanna L. Smith, President/CEO Washington, DC Miami Valley Fair Housing Center Jim McCarthy, President/CEO Dayton, Ohio Fair Housing Center of West Michigan Nancy Haynes, President/CEO Grand Rapids. MI Metro Fair Housing Services, Inc Gail Williams, Executive Director Atlanta, George Housing Opportunities Project for Excellence (HOPE, Inc.) Keenya Robertson, President/CEO Miami, Florida North Texas Fair Housing Center Frances Espinoza, Executive Director Dallas, Texas Cohen Milstein Sellers & Toll PLLC Peter Romer-Friedman, Esq. Washington, DC

Purpose of Investigation Overall, Bank of America s Real Estate Owned (REO) properties have suffered from a disproportionate amount of negligence and maltreatment in communities of color. Beginning in 2009 and continuing through the present, we investigated how Bank of America maintains and markets its REO properties nationwide. In 2011-12, we evaluated 373 single-family and townhome REO properties owned by Bank of America in eight metropolitan areas This investigation revealed significant racial disparities in maintenance and marketing in all eight metropolitan areas.

Methodology for Investigation Neighborhoods selected for investigations were made up of predominantly African-American residents, Latino residents, Non-White residents, and/or White residents. Neighborhoods selected had recent high foreclosure rates of Bank of America REOs located in the zip codes evaluated. 100% of REOs of Bank of America were evaluated within the zip codes.

Evaluation Measures Curb Appeal Accumulated mail, trash, overgrown or dead grass/shrubbery, invasive plants Structure Unsecured/broken doors, locks, windows, damaged roof, fence, deck, holes, wood rot Signage Trespass/warning signs, bank owned, For Sale signs, broken/discarded signs, unauthorized occupancy

Evaluation Measures Paint/Siding Graffiti, severe peeling/chipped paint, damaged siding, missing/broken shutters Gutters Missing, out of place, broken, hanging, obstructed Water Damage Mold, water damage, erosion Utilities Tampered with or exposed

It s the Law Peter Romer-Friedman Cohen Milstein Sellers & Toll PLLC

Federal Fair Housing Act The differing maintenance of REO properties based on the racial or ethnic composition of neighborhoods is a violation of the Fair Housing Act. HUD s regulations clearly state that failing or delaying maintenance or repairs of sale or rental dwellings because of race... is a prohibited action under the Fair Housing Act.

Federal Fair Housing Act Steering by real estate agents based on neighborhood racial composition is illegal and other behavior in the sale or rental market that operates to discourage potential buyers from purchasing or renting homes, such as by failing to adequately maintain properties in communities of color, can also violate the Act. It is unlawful to make unavailable or deny housing to any person because of race, national origin... If the poor maintenance of an REO property in an African- American or Latino neighborhood makes it difficult for a potential purchaser to obtain a mortgage loan for the property, the poor maintenance has made the housing unavailable within the meaning of the Act.

Federal Fair Housing Act The Fair Housing Act has two goals: to eliminate housing discrimination and to promote residential integration HUD s regulations interpreting the Fair Housing Act state: It shall be unlawful because of race, color, religion, national origin, sex, familial status or disability to restrict or attempt to restrict the choices of a person by word or conduct in seeking, negotiating for, buying or renting a dwelling so as to perpetuate segregated housing patterns, or to discourage or obstruct choices in a community, neighborhood or development.

A Tale of Two Recoveries

East Bay Area California Oakland, Richmond and Concord Shanna L. Smith National Fair Housing Alliance

East Bay Area 52 REOs Evaluated 11 in predominantly African-African communities 5 in predominantly Latino communities 23 in predominantly non-white communities 13 located in predominantly White communities

East Bay Area 52 REOs Evaluated REO properties in communities of color were 4.7 times as likely as REOs in White communities to have more than 10 maintenance or marketing deficiencies. 14 REOs versus 1 REO in White neighborhoods. REO properties in communities of color were 5 times as likely as REOs in White communities to have broken doors or locks.

East Bay Area 52 REOs Evaluated REO properties in communities of color were 2.3 times as likely as REOs in White communities to be marketed as distressed. REO properties in communities of color were 1.6 times as likely as REOs in White communities to not have a for sale sign.

2737 Garden St, Oakland, CA 94601 Predominantly African-American and Latino

More evidence that REO is managed by Bank of America

Neighbors Well Maintained Homes

2112 Athene Dr, Concord, CA 94519 Neighborhood: Predominantly White For Sale Sign Total Number of Deficits: 4

Professional Sign and Clean Backyard

Dayton, Ohio Jim McCarthy Miami Valley Fair Housing Center

Dayton 24 REOs Evaluated 12 located in predominantly African- African communities 12 of which were located in predominantly White communities.

Dayton 24 REOs Evaluated REO properties in African-American communities were 2.3 times as likely as REOs in White communities to have more than 10 deficiencies. 17% of REO properties in African- American communities had more than 15 deficiencies, while none of REO properties in White communities had more than 15 deficiencies.

Dayton 24 REOs Evaluated REO properties in African-American communities were 2.5 times as likely as REOs in White communities to have broken gutters. 5 of the 12 REOs in African American neighborhoods had broken gutters while only 3 of the REOs in White communities had the same problem.

430 Timberwind Lane, Vandalia, OH 45377 Neighborhood: Predominantly White

430 Timberwind Lane, Vandalia, OH 45377 Neighborhood: Predominantly White While not a perfect home since its fence needs some repairs, you still see a real estate agent s lockbox indicating its available for buyers to see..

62 Mary Ave, Dayton, OH Neighborhood: Predominantly African-American

62 Mary Ave, Dayton, OH Backyard trash unsecured garage

62 Mary Ave, Dayton, OH Next Door Neighbors Neighbors are taking care of their homes

Grand Rapids Nancy Haynes Fair Housing Center of West Michigan

Grand Rapids 87 REOs Evaluated 22 located in predominantly African- African communities 3 located in predominantly Latino communities 9 located in predominantly non-white communities 53 located in predominantly White communities

Grand Rapids 87 REOs Evaluated REO properties in communities of color were 2.3 times as likely as REOs in White communities to have more than 10 maintenance or marketing deficiencies. 71 REOs versus 31 in White neighborhoods. 24 of 34 homes in neighborhoods of color had more than 10 problems while only 16 of 53 REOs in White neighborhoods had more than 10 problems. REO properties in communities of color were 1.6 times as likely as REOs in White communities to have substantial amounts of trash on the property. 33 of the 34 REOs in communities of color had substantial trash while only 33 of 53 homes in White neighborhoods suffered. REO properties in communities of color were 2.1 times as likely as REOs in White communities to have broken doors or locks.

Grand Rapids 87 REOs Evaluated REO properties in communities of color were 3.7 times as likely as REOs in White communities to have a damaged roof. (55.9% versus 15.1%) 19 of 34 homes had a damaged roof in communities of color and only 8 of 53 REOs in White neighborhoods had the same problem. 17.7% of REO properties in communities of color had graffiti, while none of REO properties in White communities had the same problem.

1206 Veto Street NW Grand Rapids, MI 49504 Neighborhood: Predominately White

1206 Veto Street NW Grand Rapids, MI 49504 Neighborhood: Predominately White Neighbors Homes

1262 Boston St SE, Grand Rapids, MI Neighborhood: Predominantly African-American

1262 Boston St SE, Grand Rapids, MI Neighborhood: Predominantly African-American Dead leaves accumulating in February 2012 and mold on back of home.

1262 Boston St SE, Grand Rapids, MI Neighborhood: Predominantly African-American Dead animal among trash and leaves

1262 Boston St SE, Grand Rapids, MI Neighbor Next Door

Atlanta, Georgia Gail Williams Metro Fair Housing Services

Atlanta 71 REOs Evaluated 59 located in predominantly African- African communities 1 in a predominantly Latino community 5 in predominantly non-white communities 6 located in predominantly White communities

Atlanta 71 REOs Evaluated REO properties in communities of color were 1.2 times as likely as REOs in White communities to have substantial amounts of trash. So this means that 40 of the 65 homes in Communities of color had substantial trash while only 3 REOs in White neighborhoods did!

Atlanta 71 REOs Evaluated REO properties in communities of color were 1.8 times as likely as REOs in White communities to have a broken door. This means that 20 homes in communities of color had broken doors and only 1 home in the White neighborhood did. 52 REOs in communities of color were missing a For Sale sign while only 3 homes in White neighborhoods were missing a sign.

2340 Larchwood St SW, Atlanta, GA 30310 Neighborhood: Predominately African American No For Sale sign leaves still on ground February 2012

2340 Larchwood St SW, Atlanta, GA 30310 Neighborhood: Predominately African American Leaves still in front yard in February 2012. Back deck and boarded door.

2340 Larchwood St SW, Atlanta, GA 30310 Neighbor s Lawn Maintained

3306 W Shadowlawn Ave Ne, Atlanta, GA Neighborhood: Predominantly White

3306 W Shadowlawn Ave Ne, Atlanta, GA Neighborhood: Predominantly White

Miami/Fort Lauderdale, Florida Keenya Robertson Housing Opportunities Project for Excellence, Inc.

Miami Area 25 REOs Evaluated 8 located in predominantly African-African communities 2 located in predominantly Latino communities 4 of which were in predominantly non- White communities 11 of which were located in predominantly White communities

Miami Area 25 REOs Evaluated REO properties in communities of color were 3.1 times as likely as REOs in White communities to have more than 10 maintenance or marketing deficiencies. 8 of 14 REO properties in communities of color in had substantial amounts of trash while only 4 or 11 REOs in White neighborhoods had the same problem.

Miami Area 25 REOs Evaluated 42.9% of REO properties in communities of color had damaged windows, while none of REO properties in White communities had the same problem. REO properties in communities of color were 3.1 times as likely as REOs in White communities to have a damaged roof.

3910 SW 82nd Terrace, Davie, FL 33328 Neighborhood: Predominantly White

3910 SW 82nd Terrace, Davie, FL 33328 Neighborhood: Predominantly White Professional For Sale sign. Fence around pool needs repair.

3910 SW 82nd Terrace, Davie, FL 33328 Neighborhood: Predominantly White Neighbor s home.

3912 SW 136th Ave, Miami, FL Neighborhood: Predominantly Latino

3912 SW 136th Ave, Miami, FL Neighborhood: Predominantly Latino Beautiful neighborhood

Dallas, Texas Frances Espinoza North Texas Fair Housing Center

Dallas 65 REOs Evaluated 31 located in predominantly African- African communities 17 located in predominantly Latino communities 6 of which were in predominantly non- White communities 11 of which were located in predominantly White communities

Dallas 65 REOs Evaluated REO properties in communities of color were 1.9 times as likely as REOs in White communities to have substantial amounts of trash. 48 REOs in neighborhoods of color had substantial trash while only 4 REOs in White neighborhoods had trash.

Dallas 65 REOs Evaluated REO properties in communities of color were 3 times as likely as REOs in White communities to have overgrown grass or leaves. 44 homes in communities of color had over grown grass while 3 REOs in White neighborhoods suffered from over grown grass.

Dallas 65 REOs Evaluated 13% of REO properties in communities of color were marketed as distressed, while none of REO properties in White communities had the same problem). 14.8% of REO properties in communities of color had a broken mailbox, while none of REO properties in White communities had the same problem. 20.4% of REO properties in communities of color had accumulated mail, while none of REO properties in White communities had the same problem.

8629 Eden Valley Lane, Dallas, TX 75217 Neighborhood: Predominantly Latino

8629 Eden Valley Ln, Dallas, TX 75217 Neighborhood: Predominantly Latino

1007 Ann Arbor Ave Dallas, TX Neighborhood: Predominately African American

1007 Ann Arbor Ave Dallas, TX Neighborhood: Predominately African American

1007 Ann Arbor Ave Dallas, TX Neighborhood: Predominately African American Next door neighbor

5935 Prospect Ave, Dallas, TX Neighborhood: Predominantly White

Phoenix Shanna L. Smith National Fair Housing Alliance

Phoenix 8 REOs evaluated 7 located in predominantly Latino communities 1 located in a predominantly White community

Phoenix 8 REOs evaluated 71% of REO properties in communities of color had substantial amounts of trash, while the REO property in a White community did not have the same problem. 71.4% of REO properties in communities of color had dead grass on more than 50% of the lawn. 71.4% of REO properties in communities of color had broken or boarded windows, while the REO property in a White community did not have the same problem.

Phoenix 8 REOs evaluated 85.71% of REO properties in communities of color did not have a for sale sign, while the REO property in a White community did not have the same problem.

8255 W Vale Drive, Phoenix, AZ 85033 Neighborhood: Predominantly Latino

8255 W Vale Drive, Phoenix, AZ 85033 Neighborhood: Predominantly Latino Clearly managed by Bank of America.

8255 W Vale Drive, Phoenix, AZ 85033 Neighborhood: Predominantly Latino Accumulated trash and leaves as well as broken glass.

8255 W Vale Drive, Phoenix, AZ 85033 Neighborhood: Predominantly Latino The back door to the home is left wide open Discarded tiles at the door

12327 N 82nd Ave, Peoria, AZ Neighborhood: White Neighborhood

12327 N 82nd Ave, Peoria, AZ Neighborhood: Predominately White Home is neat and clean, For Sale sign, and pool prepared and covered for safety.

Metro Washington, DC Shanna L. Smith National Fair Housing Alliance

Metro-Washington DC 41 REOs Evaluated 40 located in predominantly African- American communities 1 located in a predominantly White community

Metro-Washington DC 41 REOs Evaluated 70% of REO properties in communities of color had substantial amounts of trash, while the REO property in a White community did not have the same problem. 52.2% of REO properties in communities of color had overgrown or dead shrubbery, while the REO property in a White community did not have the same problem. 30% of REO properties in communities of color had broken doors or locks, while the REO property in a White community did not have the same problem. 37.5% of REO properties in communities of color had broken or boarded windows, while the REO property in a White community did not have the same problem.

Metro-Washington DC 41 REOs Evaluated 25% of REO properties in communities of color were marketed as distressed while the REO property in a White community did not have the same problem. 80% of REO properties in communities of color did not have a for sale sign.

1213 Dunbar Oaks, Capitol Heights, MD Neighborhood: Predominately African American

1213 Dunbar Oaks, Capitol Heights, MD Neighborhood: Predominately African American

1213 Dunbar Oaks, Capitol Heights, MD Neighborhood: Predominately African American

1213 Dunbar Oaks, Capitol Heights, MD Neighborhood: Predominately African American Next door neighbor

5984 Saint Moritz, Temple Hills, MD Neighborhood: Predominately African American

5984 Saint Moritz, Temple Hills, MD Neighborhood: Predominately African American

5984 Saint Moritz, Temple Hills, MD Neighborhood: Predominately African American Neighbors clean neat, but REO has unmaintained lawn and trash.

1610 U Street SE, Washington, DC Neighborhood- Predominately African American

1610 U Street SE, Washington, DC Neighborhood- Predominately African American Broken window, trash in front and garbage bags left in front.

1003 Evarts Street NW, Washington, DC Neighborhood: Predominately African American

1003 Evarts Street NW, Washington, DC Neighborhood: Predominately African American

1851 Lamont NW, Washington, DC Neighborhood: Predominately White

Conclusion Fair housing groups want to see communities of color that were harmed by the failure to maintain and market REOs made whole. The fair housing groups are willing and eager to move forward expeditiously through the HUD investigation and conciliation process to achieve concrete solutions to the serious civil rights issues raised in the complaint.

Questions The work that provided the basis for this publication was supported by funding under a grant with the U.S. Department of Housing and Urban Development. The substance and findings of the work are dedicated to the public. The author and publisher are solely responsible for the accuracy of the statements and interpretations contained in this publication. Such interpretations do not necessarily reflect the views of the Federal Government.