Photo credit: National Fair Housing Alliance

Housing

How Poorly Maintained Bank-owned Homes Harm Black and Latino Communities

Bank-seized properties in these communities of color have higher rates of neglect, and the situation has prompted a lawsuit.

Broken and open windows at a Deustche Bank Property in a non-white neighborhood of Miami, Florida. Photo courtesy of the National Fair Housing Alliance

broken window

Broken and open windows at a Deutsche Bank Property in a non-white neighborhood of Miami, Florida.

Since the foreclosure crisis, homeownership has become a nightmare for families across the country. Not only did millions of families lose their homes, many families who were able to hold on to their homes now have a new, nightmarish neighbor—the bank.

Ongoing investigations by the National Fair Housing Alliance (NFHA) and its partners across the country show that banks are often terrible neighbors—allowing properties they have seized ownership of to have overgrown grass, piles of trash, broken and unsecured doors and windows, and other routine maintenance issues. The investigations also show that this is far more likely to occur in Black and Latino neighborhoods than in white neighborhoods.

Properties that are poorly maintained with unlocked doors and broken windows make the homes vulnerable to criminal activity and squatting. Additionally, bank-owned properties with holes and unsecured doors allow for water to accumulate, which leads to mold that contributes to asthma and other insect-borne diseases. Unsecured vacant homes are also vulnerable to rodents and other disease-carrying animals.

This situation can have devastating effects on those living in neighboring homes. Houses next to poorly maintained bank-owned properties can experience negative spillover effects, such as an increase in stress, crime, environmental health issues, and decreased property value. Simply put, this discriminatory treatment of bank-owned properties inhibits neighborhoods of color from recovering from the devastating effects of the foreclosure crisis.

NFHA and 19 other fair housing organizations have filed a federal lawsuit against Deutsche Bank, Ocwen, and Altisource for failing to maintain their properties in Black and Latino neighborhoods. NFHA investigated more than 1,100 Deutsche Bank-owned properties in 30 metropolitan areas and found that properties in Black and Latino neighborhoods are more often neglected while their properties in white neighborhoods are usually well-maintained. NFHA has nearly 30,000 photos showcasing these stark disparities.

dilapidated home's front entrance

An open door and piles of trash were found at this Deutsche Bank property in a non-white neighborhoods in Memphis. Photo courtesy of the National Fair Housing Alliance

An example is in the Memphis area, where Deutsche Bank’s properties in communities of color had trash on the premises 8.4 times more often than properties in predominantly white neighborhoods. In the Washington, D.C., area, Deutsche Bank’s properties in communities of color had trash on the premises 2.3 times more often than properties in predominantly white neighborhoods.

This stark difference in treatment is a violation of the Fair Housing Act and encourages further disinvestment in communities of color that had already been preyed upon with predatory and subprime loans during the foreclosure crisis. This is how segregation is continually perpetuated and how the racial wealth gap in this country continues to deepen.

The bank-owned house next door should not prevent African-American and Latino households from living in healthy and safe neighborhoods or enjoying the benefits of homeownership. NFHA continues to hold banks accountable for their failures to maintain bank-owned properties—this is pivotal to the fight for fair housing in communities across the country.

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