STUDY: Banks Are Treating Minority Foreclosed Homes Like Crap

A study of more than 1,000 foreclosed properties in nine cities found that banks have higher maintenance standards for properties they own in wealthy, predominantly white, neighborhoods than those in low-income ones. 

The report by the National Fair Housing Alliance looked at aspects of maintenance and marketing including curb appeal, structure, signage, indications of water damage, and conditions of paint, siding and gutters. Some key findings:

• REOs in communities of colour were 42 per cent more likely to have more than 15 maintenance problems than properties in White communities. 

• In Phoenix, AZ, 73 per cent of REO properties evaluated in Latino neighborhoods were missing a “For Sale” sign, while only 31 per cent of homes in predominantly White neighborhoods were missing a “For Sale” sign. 

• REO properties in communities of colour were 82 per cent more likely than REO properties in White communities to have broken or boarded windows. 

• In Philadelphia, PA, more than 10 distinct maintenance or marketing problems were documented in 41 per cent of homes in African-American communities, while none of the properties in White communities had more than 10 maintenance or marketing problems. 

• In Oakland, Richmond, and Concord, CA, REOs in the African-American communities were 3.45 times more likely to be missing a “For Sale” sign than their white counterparts.  

These findings suggest a violation of the Fair Housing Act, which requires banks, investors or any other responsible party to maintain and market properties that are for sale or rent without prejudice to the residents of a neighbourhood.

The group is planning legal action against two unnamed banks, according to the WSJ.

Here’s a look at signs of neglect in a black neighbourhood in Capitol Heights, Md:

foreclosed home

Photo: National Fair Housing Alliance

Now check out why foreclosure activity is expected to increase 15 per cent this year >

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